FRAUD FINANCIAL STATEMENTS IN PENTAGON'S FRAUD PERSPECTIVE (Study on the Mining Sector Listed on the Indonesia Stock Exchange 2016 –2020 Period)

FRAUD FINANCIAL STATEMENTS IN PENTAGON'S FRAUD PERSPECTIVE (Study on the Mining Sector Listed on the Indonesia Stock Exchange 2016 –2020 Period)

Fraud Pentagon, Financial StatementFraud

Fraudulent financial statements are intentional or omission by the company. The occurrence of fraudulent financial statements in addition to causing internal conflicts within a company will also harm external parties in decision making. This study aims to detect fraudulent financial statements using the fraud pentagon analysis with financial stability, external pressure, financial targets, ineffective monitoring, nature of industry, auditor replacement, replacement of directors, and the appearance of CEO images in mining sector companies listed on the Indonesia Stock Exchange. 2016-2020 period. The population in this study is the mining sector companies listed on the Indonesia Stock Exchange for the 2016-2020 period, which are 36 sample companies. The analytical technique used is logistic regression using SPSS 25 software. The results of this study indicate that the pentagon fraud simultaneously affects financial reporting fraud in mining sector companies listed on the Indonesia Stock Exchange for the 2016-2020 period. The partial test results show that the financial target and the nature of the industry have a positive effect, external pressure has a negative effect on fraudulentfinancial reporting. Financial stability, ineffective monitoring, replacement of auditors, replacement of directors, and the appearance of the CEO image have no partial effect on financial statement fraud. Based on the results in this study, the researcher provides theoretical and practical suggestions. Theoretically, researchers provide suggestions to academics and future researchers. Practically providing advice to companies as well as investors.

Melda Tri Pratiwi1, Dedik Nur Triyanto2

https://journals.telkomuniversity.ac.id/jaf/issue/view/265

Faculty ofEconomics and Business, Telkom University

September 2022

Fajar bagus W

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