This study emphasizes on examining the fraud hexagon theory referring to signs of fraud of financial statements, which employs all manufacturing companies listed in the IDX (Indonesia Stock Exchange). However, total selected sample are 153 of the manufacturing industry. The companies are categorized into indicated and not indicated committing fraud in the 2010-2018 period by applying the Beneish M-Score. The findings demonstrated that financial stability, the financial targets, the external pressures, the nature of industry, and CEO duality can be applied to predict fraud of financial statements. Meanwhile, personal financial needs, ineffective monitoring, quality of external auditors, auditor turnover, director turnover, and marginal costs cannot indicate occurrence of the fraud of financial statement. The findings conclude that pressure, ego, and opportunity significantly affect the financial statement fraud. Future research are suggested to consider different proxies for fraudulent financial statements; hence, the accuracy of the proxies can be compared with this study. Moreover, adding other proxies of conspiracy such as bonuses received by managers will be beneficial.
The objective of this study is to examine the current views of academics on issues and technology development in forensic accounting education. By applying the explanatory sequential mixed method, this study tries to acquire a better understanding of current perception regarding forensic accounting education. This study indicates that demand for forensic accounting services is expected to increase and offered as a separate courses at the graduate and undergraduate levels; respondent's perceived forensic accounting education as being relevant and beneficial to the business community, the accounting profession, and accounting students. Several technology tools and data analytics in investigation and analysis have been identified as important forensic accounting topics for curriculum developments. The limitation of this study is the small sample. A low response rate could be the result of this study containing bias so that it cannot be generalized, and most respondents are from accounting majors. These results are useful for universities in integrating forensic accounting education into their curriculum or redesigning their forensic accounting courses. The study shows the current view on forensic accounting education in Indonesia. Using an explanatory sequential mixed method is considered as a novelty of the present study.
In practice, auditors sometimes have a hard time detecting false financial statements since they only look at the figures on the financial statements. Consequently, they ignore the red flags in the annual reports’ wording. This study aims to analyze how the level of readability of annual reports and abusive earnings management affects fraudulent financial reporting. A total of 240 annual reports from publicly traded industrial businesses were used. The paper used data from the Indonesia Stock Exchange (IDX) and each sampled companies’ official website. A multiple linear regression analysis was used to test the hypotheses. Falsified financial statements are the dependent variable, while annual report readability and abusive earnings management are independent variables. The Dechow F-Score is used to assess whether financial statements are false. The annual report’s readability is assessed using the Flesch Reading Ease, Length, Flesch-Kincaid, and Lasbarhets Indexes. Finally, accrual discretionary and real earnings management are used to uncover earnings management misuse. According to the findings, dishonest earnings management has a significant influence on financial statement fraud. Moreover, abusive earnings management can aid in the detection of falsified financial statements.
AcknowledgmentsRector Universitas Trunojoyo Madura supported this paper under Grant Number 2285/UN46.3.1/PN/2019. Any and all views, results, conclusions, or recommendations stated in this material are solely those of the author(s) and do not necessarily reflect those of Universitas Trunojoyo Madura. The authors would like to express their gratitude to the Rector of Universitas Trunojoyo Madura for his efforts and cooperation in conducting this investigation.
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