The Influence of Pentagon Fraud on The Financial Statements of Infrastructure Companies Listed in Indonesia Stock Exchange

Yuniarti, Emylia; Sari, Rela; Kesuma, Nilam; Damayani, Fitri

doi:10.5220/0008442705730583

Cited by 2 publications

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“…However, Yuniarti, Sari, Kesuma and Damayani, (2018) shows that nature of industry significantly influences financial statement fraud in a firm, whereas the other independent variables such financial stability, financial target, external pressure, managerial ownership, ineffective monitoring, change in auditor, change in directors, and frequent number of CEO's picture have no influence on financial statement fraud.…”

Section: Fraud Pentagon and Financial Statement Fraudmentioning

confidence: 94%

Fraud Pentagon: Detection of Financial Statement Fraud in a Firm

Humphrey,

Isenmilia,

Omoye

2023

Mediterr. J. Soc. Sci.

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The study examines conceptually the detection of financial statements fraud using fraud pentagon. The study discusses the relationship between fraud pentagon and financial statement fraud. The methodology adopted in this study is library research whereby relevant and extant literature related to the elements in fraud pentagon were reviewed in relation to financial statements fraud. In the search for literature, it was observed that the various elements of fraud pentagon such as pressure (financial targets, financial stability, institutional ownership and external pressure), opportunity (ineffective monitoring and nature of industry), rationalization (auditor switching and change of director), competence (the changes in the company directorship and the proportion of independent directors in the board) and arrogance (frequent number of CEO's picture and CEO duality) significantly affect financial statements fraud. This study recommends that fraud pentagon should be given the statutory support in order to address financial statements fraud. Received: 27 August 2023 / Accepted: 19 October 2023 / Published: 5 November 2023

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Section: Fraud Pentagon and Financial Statement Fraudmentioning

confidence: 94%

Fraud Pentagon: Detection of Financial Statement Fraud in a Firm

Humphrey,

Isenmilia,

Omoye

2023

Mediterr. J. Soc. Sci.

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Factors affecting the integrity of financial statements

Meiryani,

Fahlevi,

Robbani

et al. 2023

CGOBR

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Financial statements can be a powerful way to disseminate information about a company’s finances or operations. Alchian’s (1950) evolutionary theory of economic change posits that market forces will naturally regulate businesses. This compiles and analyzes the empirical evidence to empirically explore, from an Indonesian perspective, how corporate governance, internal audit quality, and external pressures interact to affect the integrity of financial statements. Quantitative methods were used for this investigation. This information comes from a secondary source. The researchers here used a systematic sampling strategy called purposive sampling. This study used data from 96 samples collected over the course of three years. In this study, the researchers employed the panel data analysis technique with the help of the EViews software. Corporate governance is examined through the lenses of institutional ownership, managerial ownership, audit committees, and the proportion of independent commissioners. Financial statement integrity was found to be significantly affected by independent commissioners but not by institutional ownership, managerial ownership, or audit committees. The consistency of the financial statements is unaffected by either the quality of the internal audit or any external pressures. Managers are careful not to artificially inflate company profits in order to keep institutional investors happy, as they own a disproportionately large share of the company’s stock. This means that the stability of financial statements improves as institutional and managerial ownership grows

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The Influence of Pentagon Fraud on The Financial Statements of Infrastructure Companies Listed in Indonesia Stock Exchange

Cited by 2 publications

References 0 publications

Fraud Pentagon: Detection of Financial Statement Fraud in a Firm

Fraud Pentagon: Detection of Financial Statement Fraud in a Firm

Factors affecting the integrity of financial statements

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