Jurnal Akuntansi · 2017 · 60 citations · 10 references
BusinessAccountancyAccountingAuditingCorporate DisclosureFinancial AccountingFinancial ReportingFinancial Statement AuditsFinancial Statement FraudFinancial StatementsFraud DetectionFraud InvestigationFinancial Stability EffectsFinancial Stability ImpactFinancial Statement Fraud DetectionFinancial TargetsFraud Triangle TheoryMultiple RegressionPurposive ApproachRepresentative Samples
Financial statements disclose an entity’s financial position and performance, yet in Indonesia regulatory sanctions reveal that fraud cases often stem from audit failures by public accounting firms. The study investigates how the fraud triangle influences the detection of fraudulent financial statements. Using 123 purposively selected financial statements from Indonesian listed companies between 2012 and 2014, the authors applied multiple linear regression analysis. Rationalization significantly predicts financial statement fraud, while financial stability, external pressure, target setting, industry nature, and ineffective monitoring do not, suggesting regulators should enhance audit quality to detect fraud.
The financial statements are structured representation of the financial position shows the financial performance of an entity. On the other hand, the Financial Services Authority in Indonesia gave the sanction to capital market players for cheating Financial Statements. This shows that the financial statement fraud cases occurring in Indonesia are part of the failure of an audit conducted by the Public Accounting Firm (KAP). This study aims to examine the influence of fraud triangle in detecting fraudulent financial statements. The object of this study using the financial statements of companies listed on the Indonesia Stock Exchange in the 2012-2014 time period. This study uses 123 data samples are taken using purposive criteria. The data were analyzed using multiple linear regression analysis. The results showed that razionalization significant effect on the financial statements fraud. Meanwhile, the financial stability, external pressure, financial targets, the nature of the industry, ineffective monitoring did not significantly affect the financial statements fraud. This study contributes to the regulators to adopt measures to improve the quality of audits, especially in detecting fraud.
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