Pentagon Fraud Analysis in Detecting Fraudulent Financial Statements in Pharmaceutical Companies Listed on the Indonesia Stock Exchange (IDX)

DOI

10.2991/aebmr.k.220107.040How to use a DOI?

Keywords

Pentagon Fraud; Financial Report Fraud

Abstract

This study aims: to obtain evidence regarding the existence of partial and simultaneous effect of the component fraud pentagon on the possibility of fraudulent financial statements in pharmaceutical companies listed on the Indonesia Stock Exchange. The variables in this study are: (1) financial statement fraud as the dependent variable (Y) which is measured using the F-Score, and (2) the component fraud pentagon consisting of pressure, opportunity, rationalization, capability, and arrogance as variables (X) which is measured using the formula leverage and variables dummy. The population in this study is the annual report of pharmaceutical companies listed on the Indonesia Stock Exchange, while the samples in this study were 7 pharmaceutical companies listed on the Indonesia Stock Exchange which were taken using purposive sampling technique. Data collection is done by using documentation technique. The processed data is secondary data. Data analysis was carried out using the Classical Assumption Test, Multiple Linear Regression Analysis and Hypothesis Testing. The results showed Y = −5,218 + (3.325) LEV + (− 3,267) BDOUT + (1,197) KAP BIG4 + (0,557) DCHANGE + (0,388) CEOPIC + e. Based on the results of the analysis, it can be seen that pressure (external pressure), opportunity (ineffective supervision), rationalization (quality of external auditors), and capability (change of directors) partially have no effect on financial statement fraud. Meanwhile, arrogance (number of photos of the CEO displayed) partially has a positive effect on financial statement fraud. CEO displayed) simultaneously has a positive effect on fraudulent financial statements.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Masnawaty Sangkala
AU  - Nurhidaya Safitri
PY  - 2022
DA  - 2022/01/24
TI  - Pentagon Fraud Analysis in Detecting Fraudulent Financial Statements in Pharmaceutical Companies Listed on the Indonesia Stock Exchange (IDX)
BT  - Proceedings of the International Conference on Social, Economics, Business, and Education (ICSEBE 2021)
PB  - Atlantis Press
SP  - 210
EP  - 216
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220107.040
DO  - 10.2991/aebmr.k.220107.040
ID  - Sangkala2022
ER  -