THE ANALYSIS OF FACTORS IN THE FRAUD DIAMOND PERSPECTIVE AS PREDICTORS OF FRAUDULENT FINANCIAL REPORTING IN CONSTRUCTION COMPANIES LISTED ON IDX
DOI:
https://doi.org/10.31539/costing.v7i6.12587Keywords:
Fraudulent Financial Reporting, Fraud Diamond, Construction SectorAbstract
Fraudulent financial reporting fraud is a serious problem, especially in the construction sector, which is susceptible to manipulation. The study is intended to analyze the impact of four elements of fraud diamonds on the financial statements of fraud in Indonesia's construction sector (pressure, opportunities, rationalization, and capability). The data were collected from 21 construction companies listed on the Indonesian Stock Exchange (IDX) between 2020 and 2022, and totaled 63 observations. The analysis was conducted using multiple linear regression and the fraud score model (F-Score) as fraud detection tools. The results showed that all independent variables had positive and significant effects on financial fraud. Classical assumption tests ensure the validity of the model and the freedom from autocorrelation, multicollinearity and heteroscedasticity. This model explains 96.6% of changes in fraud in financial statements. The report recommended strengthening internal controls and developing mitigation strategies to reduce the risk of financial statements being forged.
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[2] ACFE. (2022). Occupational Fraud 2022: A Report to the nations. Austin, USA.
[3] Albrecht, C., Turnbull, C., Zhang, Y., & Skousen, C. J. (2010). The relationship between South Korean chaebols and fraud. Management Research Review, 33(3), 257–268. https://doi.org/10.1108/01409171011030408
[4] Beasley, M. S. (1996). An empirical analysis of the relation between the board of director composition and financial statement fraud. Accounting Review, 443–465.
[5] Cressey Donald, R. (1953). Others people money, A study in the social psychology of Embezzlement. Montclair: Patterson Smith.
[6] Dechow, P. M., Sloan, R. G., & Sweeney, A. P. (1996). Causes and consequences of earnings manipulation: An analysis of firms subject to enforcement actions by the SEC. Contemporary Accounting Research, 13(1), 1–36. https://doi.org/10.1111/j.1911-3846.1996.tb00489.x
[7] Dunn, P. (2004). The Impact of Insider Power on Fraudulent Financial Reporting. Journal of Management, 30(3), 397–412. https://doi.org/10.1016/j.jm.2003.02.004
[8] Eisenhardt, K. M. (1989). Agency Theory: An Assessment and Review. Academy of Management Review, 14(1), 57–74. https://doi.org/10.5465/amr.1989.4279003
[9] Haniffa, R., & Hudaib, M. (2006). Corporate Governance Structure and Performance of Malaysian Listed Companies. Journal of Business Finance & Accounting, 33(7–8), 1034–1062. https://doi.org/10.1111/j.1468-5957.2006.00594.x
[10] IAASB. (2020). Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements. New York: International Auditing and Assurance Standards Board.
[11] Jensen, M. C., & Meckling, W. H. (2019). Theory of the firm: Managerial behavior, agency costs and ownership structure. In Corporate governance (pp. 77–132). Gower.
[12] Kultsum, S. U., & Triyatno, D. N. (2022). Pengaruh Fraud Diamond Terhadap Financial Statement Fraud (Studi Terhadap Perusahaan Anggota Indeks Sri-Kehati Yang Terdaftar Di Bursa Efek Indonesia Tahun 2016-2020). EKOMBIS REVIEW: Jurnal Ilmiah Ekonomi Dan Bisnis, 10(2). https://doi.org/10.37676/ekombis.v10i2.2770
[13] Lionardi, M., & Suhartono, S. (2022). Pendeteksian Kemungkinan Terjadinya Fraudulent Financial Statement menggunakan Fraud Hexagon. Moneter - Jurnal Akuntansi Dan Keuangan, 9(1), 29–38. https://doi.org/10.31294/moneter.v9i1.12496
[14] Lou, Y.-I., & Wang, M.-L. (2009). Fraud risk factor of the fraud triangle assessing the likelihood of fraudulent financial reporting. Journal of Business & Economics Research (JBER), 7(2).
[15] Nor Aini Aprilia, S. R., & Furqani, A. (2021). Deteksi Kecurangan Laporan Keuangan Dengan Metode Fraud Diamond Pada Perusahaan Jasa. Journal of Accounting and Financial Issue (JAFIS), 2(2), 1–11. https://doi.org/10.24929/jafis.v2i2.1661
[16] Prakoso, D. B., & Setiyorini, W. (2021). Pengaruh Fraud Diamond terhadap Indikasi Kecurangan Laporan Keuangan (Studi pada Perusahaan Perkebunan yang Terdaftar di Bursa Efek Indonesia Tahun 2015-2019). Jurnal Akuntansi Dan Perpajakan, 7(2), 48–61.
[17] Skousen, C. J., Smith, K. R., & Wright, C. J. (2009). Detecting and predicting financial statement fraud: The effectiveness of the fraud triangle and SAS No. 99. In Corporate Governance and Firm Performance (Advances in Financial Economics, Vol. 13) (pp. 53–81). https://doi.org/10.1108/S1569-3732(2009)0000013005
[18] Sorenson, J. E., Grove, H. D., & Selto, F. H. (1983). Detecting management fraud: An empirical approach. Symposium on Auditing Research, 5(11), 73–116.
[19] Tiffani, L., & Marfuah, M. (2015). Deteksi financial statement fraud dengan analisis fraud triangle pada perusahaan manufaktur yang terdaftar di bursa efek Indonesia. Jurnal Akuntansi & Auditing Indonesia, 19(2), 112–125. https://doi.org/10.20885/jaai.vol19.iss2.art3
[20] Wolfe, D. T., & Hermanson, D. R. (2004). The Fraud Diamond: Considering the Four Elements of Fraud. CPA Journal, 74(12), 38–42.
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2024-11-03
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