Determinan Faktor-Faktor Capability sebagai Perspektif Fraud Diamond terhadap Kecurangan Laporan Keuangan

Yasinta Earlyda Putri; Elly Suryani

doi:10.33395/owner.v8i1.1880

Authors

Yasinta Earlyda Putri Universitas Telkom, Program Studi Akuntansi
Elly Suryani Universitas Telkom, Program Studi Akuntansi

DOI:

10.33395/owner.v8i1.1880

Keywords:

Keywords: Capability, CEO Age Similarity, CEO Education, CEO Experience, CEO Expert Power, CEO Founder, CEO Horizon, CEO Number Executive, CEO Prestige Power, Fraudulent Financial Statements

Abstract

Financial statement fraud is defined as deliberately not following the accepted accounting principles when reporting financial information, which leads to significant omissions or distortions of the facts. The purpose of this study is to determine the effect of capability in detecting fraudulent financial statements. Fraudulent financial statements can occur when a company intentionally violates accounting principles or ignores applicable financial reporting standards. Fraud diamond is one of fraud risk factor, one of which is capability. Many frauds, especially some of the multibillion-dollar ones, would not have occurred without the right person with the right capabilities in place. In this study, capabilities as measured by CEO prestige power, CEO education, CEO experience, CEO horizon, CEO founder, CEO expert power, CEO age similarity, and CEO number executive. The type of data used in this study is secondary data in manufacturing companies listed on the Indonesia Stock Exchange in 2017-2021. Sampling method by purposive sampling, obtained as many as 114 companies as samples. The data analysis method used logistics regression. The results of this study show that CEO age similarity and CEO number executive has a positive impact on fraudulent financial statements, meanwhile the other variables have no impact of fraudulent financial statements.

Downloads

Download data is not yet available.

Plum-X Analityc

References

Abernethy, M. A., Jiang, L., & Kuang, Y. F. (2019). Can organizational identification mitigate the CEO horizon problem? Accounting, Organizations and Society, 78, 101056. https://doi.org/10.1016/j.aos.2019.07.002

ACFE. (2022). Occupational Fraud 2022: A Report to the Nations. https://legacy.acfe.com/report-to-the-nations/2022/

ACFE Indonesia Chapter. (2019). Survai Fraud Indonesia. Https://Acfe-Indonesia.or.Id/Survei-Fraud-Indonesia/.

Achakzai, M. A. K., & Peng, J. (2023). Detecting financial statement fraud using dynamic ensemble machine learning. International Review of Financial Analysis, 89, 102827. https://doi.org/10.1016/j.irfa.2023.102827

Alhmood, M. A., Shaari, H., & Al-dhamari, R. (2020). CEO characteristics and real earnings management in Jordan. International Journal of Financial Research, 11(4), 255–266. https://doi.org/10.5430/ijfr.v11n4p255

Alhmood, M., Shaari, H., Al-Dhamari, R., & Sani, A. A. (2023). Does ownership concentration matter for the relationship between CEO characteristics and real earnings management: evidence from Jordan. EuroMed Journal of Business. https://doi.org/10.1108/EMJB-09-2022-0155

Ashtiani, M. N., & Raahemi, B. (2022). Intelligent Fraud Detection in Financial Statements Using Machine Learning and Data Mining: A Systematic Literature Review. In IEEE Access (Vol. 10, pp. 72504–72525). Institute of Electrical and Electronics Engineers Inc. https://doi.org/10.1109/ACCESS.2021.3096799

Aviantara, R. (2021). The Association Between Fraud Hexagon and Government’s Fraudulent Financial Report. Asia Pacific Fraud Journal, 6(1), 26. https://doi.org/10.21532/apfjournal.v6i1.192

Avortri, C., & Agbanyo, R. (2020). Determinants of management fraud in the banking sector of Ghana: the perspective of the diamond fraud theory. Journal of Financial Crime, 28(1), 142–155. https://doi.org/10.1108/JFC-06-2020-0102

Ben Moussa, N., & El Arbi, R. (2020). The impact of Human Resources Information Systems on individual innovation capability in Tunisian companies: The moderating role of affective commitment. European Research on Management and Business Economics, 26(1), 18–25. https://doi.org/10.1016/j.iedeen.2019.12.001

Beneish, M. D. (1999). The Detection of Earnings Manipulation. Financial Analysts Journal, 55(5), 24–36. https://doi.org/10.2469/faj.v55.n5.2296

Bouaziz, D., Salhi, B., & Jarboui, A. (2020). CEO characteristics and earnings management: empirical evidence from France. Journal of Financial Reporting and Accounting, 18(1), 77–110. https://doi.org/10.1108/JFRA-01-2019-0008

Bunner, J., Prem, R., & Korunka, C. (2019). How do safety engineers improve their job performance? The roles of influence tactics, expert power, and management support. Employee Relations: The International Journal, 42(2), 381–397. https://doi.org/10.1108/ER-04-2018-0120

Chapple, E., Walsh, K., & Shen, Y. (2020). Corporate Culture and Fraud. In Corporate Fraud Exposed (pp. 85–106). Emerald Publishing Limited. https://doi.org/10.1108/978-1-78973-417-120201006

Che-Ahmad, A. B., Olarinoye Abdulmalik, S., & Mohamad Yusof, N. Z. (2020). CEO career horizons and earnings quality in family firms. Asian Review of Accounting, 28(2), 153–172. https://doi.org/10.1108/ARA-02-2019-0029

Chen, W. (Tina), Zhou, G. (Stephen), & Zhu, X. (Kevin). (2019). CEO tenure and corporate social responsibility performance. Journal of Business Research, 95, 292–302. https://doi.org/10.1016/j.jbusres.2018.08.018

Cheng, C.-H., Kao, Y.-F., & Lin, H.-P. (2021). A financial statement fraud model based on synthesized attribute selection and a dataset with missing values and imbalanced classes. Applied Soft Computing, 108, 107487. https://doi.org/10.1016/j.asoc.2021.107487

Chris E. Hogan, Mark S. Beasley, Randal J. Elder, & Alvin A. Arens. (2020). Auditing and Assurance Services (17th ed.). Harlow?: Pearson Education.

Chua, M., Ab Razak, N. H., Nassir, A. M., & Yahya, M. H. (2022). Dynamic capital structure in Indonesia: Does the education and experience of CEOs matter? Asia Pacific Management Review, 27(1), 58–68. https://doi.org/10.1016/j.apmrv.2021.05.003

Craja, P., Kim, A., & Lessmann, S. (2020). Deep learning for detecting financial statement fraud. Decision Support Systems, 139, 113421. https://doi.org/10.1016/j.dss.2020.113421

Cressey, D. R. (1953). Other People’s Money: A Study in the Social Psychology of Embezzlement - Donald Ray Cressey - Google Books. https://books.google.co.id/books/about/Other_People_s_Money.html?id=FgAFAAAAMAAJ&redir_esc=y

Dayanandan, A., Donker, H., & Nofsinger, J. (2019). The role of caste for board membership, CEO, and interlocking. Pacific-Basin Finance Journal, 54, 29–41. https://doi.org/10.1016/j.pacfin.2019.01.009

Demetriades, P., & Owusu-Agyei, S. (2022). Fraudulent financial reporting: an application of fraud diamond to Toshiba’s accounting scandal. Journal of Financial Crime, 29(2), 729–763. https://doi.org/10.1108/JFC-05-2021-0108

Fan, Y., Jiang, Y., John, K., & Liu, F. H. (2021). From watchdog to watchman: Do independent directors monitor a CEO of their own age? Journal of Empirical Finance, 61, 206–229. https://doi.org/10.1016/j.jempfin.2021.01.008

Finkelstein, S. (1992). Power In Top Management Teams: Dimensions, Measurement, and Validation. In Academy of Management Journal (Vol. 35, Issue 3).

IAPI. (2021). Standar Audit 240 (Revisi 2021). Https://Iapi.or.Id/Cpt-Special-Content/Standar-Audit-Sa/.

Idode, P., Oluoch, O., & Margret, O. (2018). Effect of Interlocking Directorship on Discretionary Earnings Quality: Evidence from Nigeria. Asian Journal of Economics, Business and Accounting, 7(2), 1–12. https://doi.org/10.9734/ajeba/2018/40733

Ifsan Lukmannul Hakim. (2015, July 22). Skandal Terungkap, CEO Toshiba Mundur. Liputan 6.

Khamainy, A. H., Amalia, M. M., Cakranegara, P. A., & Indrawati, A. (2022). Financial Statement Fraud: The Predictive Relevance of Fraud Hexagon Theory. Journal of Accounting and Strategic Finance, 5(1), 110–133. https://doi.org/10.33005/jasf.v5i1.249

Monica Warenza. (2019, March 29). Tiga Pilar dan Drama Penggelembungan Dana. Https://Www.Cnbcindonesia.Com/Market/20190329075353-17-63576/Tiga-Pilar-Dan-Drama-Penggelembungan-Dana.

Rahma, D. V., & Suryani, E. (2019). Pengaruh Faktor-Faktor Fraud Triangle Terhadap Financial Statement Fraud. Jurnal ASET (Akuntansi Riset), 11(2), 301–314. https://doi.org/10.17509/jaset.v11i2.17926

Sawangarreerak, S., & Thanathamathee, P. (2021). Detecting and Analyzing Fraudulent Patterns of Financial Statement for Open Innovation Using Discretization and Association Rule Mining. Journal of Open Innovation: Technology, Market, and Complexity, 7(2), 128. https://doi.org/10.3390/joitmc7020128

Sheikh, S. (2019). An examination of the dimensions of CEO power and corporate social responsibility. Review of Accounting and Finance, 18(2), 221–244. https://doi.org/10.1108/RAF-01-2018-0034

Shiah-Hou, S. R. (2021). Powerful CEOs and earnings quality. Managerial Finance, 47(12), 1714–1735. https://doi.org/10.1108/MF-07-2020-0363

Sigit Setya Wicaksono, & Mohammad Nasih. (2021). Pengaruh CEO Dan CFO yang Memiliki Pengalaman Sebagai Auditor Terhadap Kualitas Laporan Keuangan. Jurnal Akuntansi Dan Bisnis, Vol.21, No.1, 21, 116125.

Sihombing, T., & Eirene Panggulu, G. (2022). Fraud Hexagon Theory And Fraudulent Financial Statement In IT Industry In Asean. Jurnal Reviu Akuntansi Dan Keuangan, 12(3), 524–544. https://doi.org/10.22219/jrak.v12i3.23334

Simsek, Z. (2007). CEO tenure and organizational performance: An intervening model. Strategic Management Journal, 28(6), 653–662. https://doi.org/10.1002/smj.599

Situngkir, N. C., & Triyanto, D. N. (2020). Detecting Fraudulent Financial Reporting Using Fraud Score Model and Fraud Pentagon Theory?: Empirical Study of Companies Listed in the LQ 45 Index. The Indonesian Journal of Accounting Research, 23(03). https://doi.org/10.33312/ijar.486

Somwethee, P., Aujirapongpan, S., & Ru-Zhue, J. (2023). The influence of entrepreneurial capability and innovation capability on sustainable organization performance: Evidence of community enterprise in Thailand. Journal of Open Innovation: Technology, Market, and Complexity, 9(2), 100082. https://doi.org/10.1016/j.joitmc.2023.100082

Suherman, S., Usman, B., Mahfirah, T. F., & Vesta, R. (2021). Do female executives and CEO tenure matter for corporate cash holdings? Insight from a Southeast Asian country. Corporate Governance: The International Journal of Business in Society, 21(5), 939–960. https://doi.org/10.1108/CG-07-2020-0290

Suryani, E., & Fajri, R. R. (2022). Fraud Triangle Perspective: Artificial Neural Network Used in Fraud Analysis. Quality - Access to Success, 23(188), 154–162. https://doi.org/10.47750/QAS/23.188.22

Suryani, E., Winarningsih, S., Avianti, I., Sofia, P., & Dewi, N. (2023). Does Audit Firm Size and Audit Tenure Influence Fraudulent Financial Statements? In Australasian Accounting, Business and Finance Journal (Vol. 17, Issue 2).

Sutrisno, P., Utama, S., Hermawan, A. A., & Fatima, E. (2023). Do founder CEOs and overconfidence affect firm risk? Accounting Research Journal. https://doi.org/10.1108/ARJ-09-2022-0234

Tupper, C., & Mehta, A. (2023). The role of national context in the relationship between founder CEO and IPO performance. Multinational Business Review, 31(3), 381–412. https://doi.org/10.1108/MBR-06-2022-0092

Vernando, A., & Rakhman, F. (2018). Masa Kerja CEO dan Manajemen Laba (CEO Tenure and Earnings Management). Jurnal Akuntansi Dan Keuangan Indonesia, 15(2), 202–216. https://doi.org/10.21002/jaki.2018.11

Wicaksono, A., & Suryandari, D. (2021). Accounting Analysis Journal The Analysis of Fraudulent Financial Reports Through Fraud Hexagon on Public Mining Companies ARTICLE INFO ABSTRACT. Accounting Analysis Journal, 10(3), 220–228. https://doi.org/10.15294/aaj.v10i3.54999

Wolfe, D. T., & Hermanson, D. R. (2004). The Fraud Diamond: Considering the Four Elements of Fraud. https://digitalcommons.kennesaw.edu/facpubs

Zhou, M., Chen, F., & Chen, Z. (2021). Can CEO education promote environmental innovation: Evidence from Chinese enterprises. Journal of Cleaner Production, 297, 126725. https://doi.org/10.1016/j.jclepro.2021.126725