Financial Reporting Manipulation on Mining Companies in Indonesia: Fraud Diamond Theory Approach

Purwanti, Atiek Sri; Persada, Yonathan Daya; Budianto, Roni; Suyono, Eko; Khotimah, Sofiatul

doi:10.23969/jrak.v14i1.5286

Cited by 4 publications

(9 citation statements)

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“…This information made auditors switch because they couldn't produce meaningful outcomes. The findings of this study were consistent with those of research carried out by Nuristya and Ratmono (2022) and Purwanti et al, (2022) which stated that there was no effect of auditor switching with financial statement fraud. However, this result was different from Omukaga (2021) who found that auditor switching had an effect on financial statement fraud.…”

Section: The Influence Of Auditor Switching On Financial Statement Fraudsupporting

confidence: 92%

“…These outcomes were consistent with research carried out by Andriani et al, (2022) which states that the existence of independent commissioners tended to reduce the potential for fraud that would arise. However, this result was not in line with the research conducted by Achmad, Ghozali and Pamungkas, (2022), Purwanti et al, (2022) and Murtado et al, (2022) which state that the effectiveness of monitoring has no effect on financial statements fraud.…”

Section: The Influence Of Monitoring Effectiveness On Financial State...contrasting

confidence: 77%

“…This is because it has been regulated by the OJK to replace the auditors every three years to maintain the independence of the external auditors themselves. This result was reinforced by research conducted by Nuristya and Ratmono (2022) and Purwanti et al, (2022) showed that auditor switching and political connections had no effect on financial statement fraud. Meanwhile, research conducted by Omukaga (2021) and Chaney et al, (2011) which stated that auditor switching and political connections had an effect on financial statement fraud.…”

Section: The Influence Of Financial Targets Effectiveness Monitoring ...mentioning

confidence: 83%

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Determinants of Financial Statement Fraud: Political Connections as Moderation

-¹,

-²

2023

IJFMR

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Financial statement fraud is a significant issue that negatively affects the company's external customers. Many studies regarding factors that influence fraud financial statements have been carried out. The purpose of this study is to examine and gather empirical data regarding the impact of financial targets, effectiveness monitoring, auditor switching, and political connections of financial statement fraud with political connections as a moderating variable. This study is anticipated to assist users of financial statements in making decisions and serve as a resource for other research. The data in this study were obtained from the annual reports of transportation companies listed on the Indonesia Stock Exchange (IDX) for the period between 2017 and 2019. The sampling technique in this research was purposive sampling which produced 25 companies with the total analysis unit to 75 units. Data analysis methods used are descriptive statistical analysis and statistical analysis with absolute difference regression analysis and using the IBM SPSS 25 program. The results of this research indicated that financial target and effectiveness monitoring affected on financial statement fraud, while auditor switching and political connections had no effect on financial statement fraud. In addition, political connections is able to weaken the effect of effectiveness monitoring on financial statement fraud and political connections is not able to moderate independent variables; financial targets and auditor switching on the financial statement fraud. This research is expected to be able to contribute in determining the policies of users of financial statements as well as being a reference for further research development. To ensure that the financial reports presented are correct and serve as a basis for decisions and policies as well as a form of information transparency for businesses and other stakeholders, organizations must enhance their vigilance in responding to financial statement fraud

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Section: The Influence Of Auditor Switching On Financial Statement Fraudsupporting

confidence: 92%

Section: The Influence Of Monitoring Effectiveness On Financial State...contrasting

confidence: 77%

Section: The Influence Of Financial Targets Effectiveness Monitoring ...mentioning

confidence: 83%

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Determinants of Financial Statement Fraud: Political Connections as Moderation

-¹,

-²

2023

IJFMR

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“…Financial stability merupakan penggambaran ketika keuangan perusahaan dalam keadaan yang tidak stabil, sehingga memberikan pressure kepada manajemen untuk berbuat fraud (Sasongko & Wijayantika, 2019). Financial stability yang dinilai dengan rasio asset change dalam laporan keuangan berpengaruh positif terhadap fraudulent financial statement (Apriliana & Agustina, 2017) & (Purwati et al, 2022). Bahwa semakin besar rasio asset change perusahaan maka semakin besar juga terjadinya tindakan fraud.…”

Section: Pendahuluanunclassified

Pengaruh Fraud Hexagon Terhadap Fraudulent Financial Statement

Maulina,

Meini

2023

JAUJ

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Fraudulent financial statements are actions that are carried out in a planned manner that harm other parties by presenting incorrect financial information. This research aims to analyze the influence of the fraud hexagon theory, that measured with financial stability, external pressure, financial target, state owned enterprises, ineffective monitoring, and frequent number of CEO’s picture on fraudulent financial statement, empirical study on companies listed on the IDX for the period 2017 – 2021. This research contributes by considering more conditions that affect the possibility of fraud. The number of data samples in this study were 81 manufacturing companies and the total number of observations was 405. This study used Logistic Regression analysis which was processed using SPSS V25. The results of this study indicate that external pressure, state owned enterprises, and frequent number of CEO’s picture has a positive effect on fraudulent financial statement, while financial stability, financial target, and ineffective monitoring does not have effect on fraudulent financial statement. It is hoped that the company will further improve the control of the company, especially in dealing with fraud in financial statements based on the fraud hexagon theory.Keywords: Fraud, Fraud Hexagon, Fraudulent Financial StatementABSTRAKFraudulent financial statement merupakan perbuatan yang dilakukan secara terencana yang merugikan pihak lain dengan cara menyajikan informasi keuangan yang salah. Penelitian ini bertujuan untuk menganalisis pengaruh teori fraud hexagon, dengan menggunakan pengukuran financial stability, external pressure, financial target, state owned enterprises, ineffective monitoring, dan frequent number of CEO’s picture terhadap fraudulent financial statement, studi empiris pada perusahaan yang terdaftar di BEI periode 2017 – 2021. Penelitian ini memberi kontribusi dengan mempertimbangkan lebih banyak kondisi yang mempengaruhi kemungkinan terjadinya kecurangan. Jumlah sampel data pada penelitian ini adalah 81 perusahaan manufaktur dan jumlah total observasi 405. Penelitian ini menggunakan analisis Regresi Logistik yang diolah menggunakan SPSS V25. Hasil penelitian ini menunjukan bahwa kondisi external pressure, state owned enterprises, dan frequent number of CEO’s picture berpengaruh positif terhadap peluang terjadinya kecurangan laporan keuangan. Sedangkan financial stability, financial target, dan ineffective monitoring tidak berpengaruh terhadap fraudulent financial statement. Diharapkan perusahaan untuk lebih meningkatkan pengendalian/kontrol mereka terutama dalam mengatasi kecurangan dalam laporan keuangan berdasarkan teori fraud hexagon.Kata Kunci: Fraud, Fraud Hexagon, Kecurangan Laporan Keuangan

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“…Amara et al (2013) showed that the proportion of independent board members negatively affected financial statement fraud. Purwanti et al (2022) discovered the link between changes of directors on the frequency of fraudulent financial reporting and they found that replacement of directors has no impact on fraudulent reporting. Consistent with previous studies, we hypothesized that: H 4 : There is a negative relationship between capability and the likelihood of fraud…”

Section: Fraud and The Fraud Diamond Theorymentioning

confidence: 99%

Fraud Diamond Factors, Risk Management Practices and the Likelihood of Fraud among Financially Distressed Companies Listed on the Malaysian Stock Exchange

Fauzi¹,

Marzuki²,

Zakaria³

2022

APMAJ

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Firms have tendencies to manipulate their financial statements when it is at risk of bankruptcy due to financial distress. Based on the Fraud Diamond Theory, there are four factors that motivate firms to perpetrate fraud, namely pressure, opportunity, rationalization and capability. Therefore, this study investigated the effect of these fraud diamond factors on the likelihood of fraudulent financial reporting among financially distressed firms in Malaysia. In addition, this study investigated whether the new amendment of code of corporate governance on risk management practices can mitigate the effect of these four factors on the likelihood of fraudulent financial reporting. Based on a sample of 53 financially distressed firms from 2014 until 2019, this study found that two fraud diamond factors which are pressure and capability significantly influenced firms’ financial distress and thus influenced the likelihood of fraud. The study found that risk management can reduce pressure and thus reduce the likelihood of fraud of financially distressed firms. Meanwhile, distressed firms change directors to replace with competent ones. Nevertheless, the study found that distressed firms may increase their risk disclosures to cover up their distress by changing directors. This study investigated the prevalence of fraud among distressed firms. Furthermore, it extends the literature of risk management among distressed firms. Keywords: fraud, fraud diamond, risk management, financial distress

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Financial Reporting Manipulation on Mining Companies in Indonesia: Fraud Diamond Theory Approach

Cited by 4 publications

References 0 publications

Determinants of Financial Statement Fraud: Political Connections as Moderation

Determinants of Financial Statement Fraud: Political Connections as Moderation

Pengaruh Fraud Hexagon Terhadap Fraudulent Financial Statement

Fraud Diamond Factors, Risk Management Practices and the Likelihood of Fraud among Financially Distressed Companies Listed on the Malaysian Stock Exchange

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