The Impact of Pentagon's Fraud Elements on Predicting Financial Report Fraud
Abstract
The present study aims to investigate the impact of fraudulent components within the Pentagon on its ability to predict the occurrence of financial report fraud. This research employs several independent variables, including financial targets, external pressure, liquidity, nature of the industry, audit opinion, proportion of independent commissioners, and a number of CEO photos, while the dependent variable is fraudulent financial reporting. This investigation employed data pertaining to manufacturing enterprises that were listed on the Indonesia Stock Exchange during the period spanning from 2018 to 2020. In this study, a total of 104 companies were sampled and a purposive sampling method was utilized to obtain 310 data points. The present investigation utilized a statistical tool known as multiple regression analysis. The findings of the present investigation demonstrate that both the financial target variables and the types of industries significantly adversely impact the occurrence of fraudulent financial reporting. Notably, the factors of external pressure, liquidity, audit opinion, the ratio of independent commissioners, and the quantity of CEO images appear to bear no influence on fraudulent financial reporting.
Keywords: Fraud Pentagon, Fraudulent Financial Reporting, Financial Target
References
Adnovaldi, Y., & Wibowo. (2019). Analisis Determinan Fraud Diamond Terhadap Deteksi Fraudulent Financial Statement. Jurnal Informasi, Perpajakan, Akuntansi, Dan Keuangan Publik, 14(2), 125–146. https://doi.org/10.25105/jipak.v14i2.5195
Akbar, T. (2017). The Determination of Fraudulent Financial Reporting Causes by Using Pentagon Theory on Manufacturing Companies in Indonesia. International Journal of Business, Economics and Law, 14(5), 106–113.
Apriliana, S., & Agustina, L. (2017). The Analysis of Fraudulent Financial Reporting Determinant through Fraud Pentagon Approach. Jurnal Dinamika Akuntansi, 9(2), 154–165. https://doi.org/10.15294/jda.v7i1.4036
Dalnial, H., Kamaluddin, A., Sanusi, Z. M., & Khairuddin, K. S. (2014). Detecting Fraudulent Financial Reporting through Financial Statement Analysis. Journal of Advanced Management Science, 2(1), 17–22. https://doi.org/10.12720/joams.2.1.17-22
Dechow, P. M., Ge, W., Larson, C. R., & Sloan, R. G. (2011). Predicting Material Accounting Misstatements. Contemporary Accounting Research, 28(1), 17–82. https://doi.org/10.1111/j.1911-3846.2010.01041.x
Khoirunnisa, A., Rahmawaty, A., & Yasin, Y. (2020). Fraud Pentagon Theory dalam Mendeteksi Fraudulent Financial Reporting Pada Perusahaan yang Terdaftar di Jakarta Islamic Index 70 (JII 70) Tahun 2018. BISNIS : Jurnal Bisnis Dan Manajemen Islam, 8(1), 97–110. https://doi.org/10.21043/bisnis.v8i1.7381
Lestari, M. I., & Henny, D. (2019). Pengaruh Fraud Pentagon Terhadap Fraudulent Financial Statements Pada Perusahaan Perbankan Yang Terdaftar Di Bursa Efek Indonesia Tahun 2015-2017. Jurnal Akuntansi Trisakti, 6(1), 141–156. https://doi.org/10.25105/jat.v6i1.5274
Nugraha, N. D. A., & Henny, D. (2015). Pendeteksian Laporan Keuangan Melalui Faktor Resiko, Tekanan dan Peluang. E-Journal Akuntansi Trisakti, 2(1), 29–48.
Permatasari, M. D., Ningrum, Y. P., Yahya, A., & Triwibowo, E. (2022). Pengaruh Likuiditas dan Intensitas Modal Terhadap Agresivitas Pajak. Jurnal Pengembangan Wiraswasta, 24(1), 47. https://doi.org/10.33370/jpw.v24i1.730
Puspitaningrum, M. T., Taufiq, E., & Wijaya, S. Y. (2019). Pengaruh Fraud Triangle Sebagai Prediktor Kecurangan Pelaporan Keuangan. Jurnal Bisnis Dan Akuntansi, 21(1), 77–88. https://doi.org/10.34208/jba.v21i1.502
Reskino, & Anshori, M. F. (2016). Model Pendeteksian Kecurangan Laporan Keuangan dengan Analisis Fraud Triangle. Jurnal Akuntansi Multiparadigma, 7(2), 256–269. https://doi.org/10.18202/jamal.2016.08.7020
Sari, M. P., Kiswanto, Rahmadani, L. V., Khairunnisa, H., & Pamungkas, I. D. (2020). Detection fraudulent financial reporting and corporate governance mechanisms using fraud diamond theory of the property and construction sectors in Indonesia. Humanities and Social Sciences Reviews, 8(3), 1065–1072. https://doi.org/10.18510/HSSR.2020.83109
Sekaran, U., & Bougie, R. (2016). Research Methods for Business (7th ed.). John Wiley & Sons Ltd.
Wibowo, E. T., & Yahya, A. (2022). Ukuran Perusahaan Sebagai Moderasi Pengaruh Profitabilitas Dan Solvabilitas Terhadap Audit Delay. Jurnal Manajemen Kewirausahaan, 19(1), 41. https://doi.org/10.33370/jmk.v19i1.769
Widati, S., Wibowo, E. T., Yahya, A., & Safa’ah, N. (2023). Analysis of Financial Ratio Before and During Covid-19 in Consumer Goods Industry Sector 2018-2021. Kontigensi: Jurnal Ilmiah Manajemen, 11(1), 137–142.
Yahya, A., & Hidayat, S. (2020). The Influence of Current Ratio, Total Debt to Total Assets, Total Assets Turn Over, and Return on Assets on Earnings Persistence in Automotive Companies. Journal of Accounting Auditing and Business, 3(1), 62. https://doi.org/10.24198/jaab.v3i1.24959
Yahya, A., Permatasari, M. D., Hidayat, T., Fahruroji, M., Bangsa, U. P., & Akuntansi, P. S. (2021). Tax Avoidance : Good Corporate Governance dan Kualitas Audit. Jurnal Pelita Ilmu, 15(02), 95–105.
Yesiariani, M., & Rahayu, I. (2017). Deteksi financial statement fraud: Pengujian dengan fraud diamond. Jurnal Akuntansi & Auditing Indonesia, 21(1), 49–60. https://doi.org/10.20885/jaai.vol21.iss1.art5
Yulistyawati, N. K. A., Suardikha, I. M. S., & Sudana, I. P. (2019). The analysis of the factor that causes fraudulent financial reporting with fraud diamond. Jurnal Akuntansi & Auditing Indonesia, 23(1), 1–10. https://doi.org/10.20885/jaai.vol23.iss1.art1