Detection of Financial Reporting Fraud: The Case of Socially Responsible Firms

Dedik Nur Triyanto

doi:10.14414/jebav.v22i3.1792

Vol. 22 No. 3 (2019), Articles

Vol. 22 No. 3 (2019)

Detection of Financial Reporting Fraud: The Case of Socially Responsible Firms

Articles

DOI: 10.14414/jebav.v22i3.1792

Published 30-03-2020

Dedik Nur Triyanto⁺⁻

Dedik Nur Triyanto

Telkom University

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Keywords

Financial fraud
Fraud Pentagon
Social-ly responsible firms

How to Cite

Triyanto, D. N. (2020). Detection of Financial Reporting Fraud: The Case of Socially Responsible Firms. Journal of Economics, Business, and Accountancy Ventura, 22(3), 399-410. https://doi.org/10.14414/jebav.v22i3.1792

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Abstract

This study aims to analyze the implementation of fraud pentagon theory, covering pressure, opportunity, rationalization, competence, and arrogance variables on financial statement fraud using the Beneish M-score method for socially responsible companies listed in the SRI-KEHATI index of the Indonesia Stock Exchange in the period 2013-2018. The secondary data were taken from the annual reports and audited financial statements of companies. The sample was selected using a purposive sampling in which 13 SRI-KEHATI index companies as the sample with a four-year research period in 2013-2018, a totally of 78 samples. The data were analyzed using descriptive statistical analysis and logistic regression analysis using IBM SPSS statistical software 25. The results showed financial targets, ineffective monitoring, and the nature of the industry, changes in directors, and the frequency of the appearance of CEO photos simultaneously influencing financial statement fraud. Partially, ineffective monitoring, changes in directors and the frequency of CEO photos on fraudulent financial statements have a negative effect, and the nature of the industry has a positive effect, while financial targets do not affect financial statement fraud. This research can be used as a reference for stakeholders in the company to consider the proportion of independent directors and the ratio of receivables in detecting fraud in a company.

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Detection of Financial Reporting Fraud: The Case of Socially Responsible Firms

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