Title : Determinants of Financial Statement Fraud: The Perspective of Pentagon Fraud Theory (Evidence on Islamic Banking Companies in Indonesia)
Authors:
- Sarwenda Biduri
- Bambang Tjahjadi
Department : Accounting
Journal Name : Journal of Islamic Accounting and Business Research
Kinds of Journal : Q2
Keywords : Financial Empowerment, Pentagon Fraud Theory Islamic Banking Companies
Abstract:
Purpose
The purpose of this study was to determine the determinants of financial statements Fraud: The Perspective of Pentagon Fraud Theory.
Design/methodology/approach
This study used quantitative methods with an explanatory research design by Applying Secondary Data on Islamic Banking Companies listed on the Indonesia Stock Exchange (IDX).
Findings
External Pressure Affects Financial Statement Fraud, Ineffective Monitoring Affects Financial Statement Fraud, External Auditor Quality Affects Financial Statement Fraud, Change in Auditor Affects Financial Statement Fraud, Frequent Number of CEO's Picture Affects Financial Statement Firm Size, Ineffective Monitoring Affects Firm Size, External Auditor Quality Affects Firm Size, Change in Auditor Affects Firm Size, Frequent Number of CEO's Picture Affects Firm Size, Firm Size Affects Financial Statement Fraud, Firm Size Mediateship between external pressure on financial statement fraud, firm size mediates the relationship between ineffective monitoring on financial statement fraud, firm size mediats the relationship between external auditors and financial statements, Auditor and Financial Statement Fraud, Firm Size Mediates the Relationship between Frequent Number of CEO's picture and financial statement fraud.
Research limitations/implications
The limitations of this research were found during the research process and can be used as input for further research and related parties in conducting the research to object better research results. The limitations of this study are as follows: This study only focused on Islamic banking, so it cannot be generalized to other sectors. Besides, this study only tested five independent variables, one dependent variable and one medical variable.
Practical Implications
For External Auditors, Financial Statement Fraud by Management Might Be Caused by many factors and is a social as an economic problem that must be address immediately. Therefor, in carrying out the duties and roles as an external auditor, they must have an attitude of independence (not taking sides) in the mental attitude that must be maintained by the auditor related to the assignment. Auditors must have sufficient technical expertise and training as auditors. In carrying out the audit, the auditor should use their professional skills in responding careful and thoroughly. Moreover, in carrying out audit work, the auditor must have a plan, must know adequate internal control and obtain sufficiently competent audit evidence.
Originality/value
To the best of the author 'knowledge, very few studies in Indonesia have applied the benefits model. There is only one study that implemented the Beneish Model, and the Study Examination Only a Few Companies listed on the IDX. The Findings of the Present Study Have Important Implications Not Only For Banks But Also For Users of Financial Statement Accounts in Indonesia, Espacially for Investors, Auditors, Regulators, Taxation and Other State Authorities.
For Details : https://www.emald.com/insight/content/doi/10.1108/jiabr-08-2022-0213/Full/html
