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Analysis of Fraudulent Financial Reporting With the Role of KAP Big Four as a Moderation Variable: Crowe's Fraud's Pentagon Theory

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  • Maylia Pramono Sari
  • Nindya Pramasheilla
  • Fachrurrozie
  • Trisni Suryarini
  • Imang Dapit Pamungkas

Abstract

The purpose of this study is to provide empirical evidence of pentagon fraud risk factors sush as financial targets, financial stability, number of audit committee members, nature of industry, change in auditors, auditor opinion, change in director, proportion of the independent commissary, frequent number of CEO pictures, and CEO duality on fraudulent financial reporting with KAP big four as a moderating variable. The samples in this study were all state-owned companies listed on the Indonesia Stock Exchange in 2014-2018. The purposive sampling technique was used in sampling so that 55 companies were obtained. This study uses logistic regression analysis techniques with SPSS version 26. The results of the study indicate that financial stability and the auditor's opinion influence the fraudulent financial reporting. However, financial targets, number of audit committee members, nature of industry, change in auditors, change in director, proportion of the independent commissary, frequent number of CEO pictures, and CEO duality not effect on fraudulent financial reporting.

Suggested Citation

  • Maylia Pramono Sari & Nindya Pramasheilla & Fachrurrozie & Trisni Suryarini & Imang Dapit Pamungkas, 2020. "Analysis of Fraudulent Financial Reporting With the Role of KAP Big Four as a Moderation Variable: Crowe's Fraud's Pentagon Theory," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(5), pages 180-190, October.
  • Handle: RePEc:jfr:ijfr11:v:11:y:2020:i:5:p:180-190
    DOI: 10.5430/ijfr.v11n5p180
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    References listed on IDEAS

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    1. Yang, Dan & Jiao, Hao & Buckland, Roger, 2017. "The determinants of financial fraud in Chinese firms: Does corporate governance as an institutional innovation matter?," Technological Forecasting and Social Change, Elsevier, vol. 125(C), pages 309-320.
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    3. M. Chabachib & Tyana Ulfa Fitriana & Hersugondo Hersugondo & Imang Dapit Pamungkas & Udin Udin, 2019. "Firm Value Improvement Strategy, Corporate Social Responsibility, and Institutional Ownership," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(4), pages 152-163, July.
    4. Sugeng Wahyudi & Tarmizi Achmad & Imang Dapit Pamungkas, 2019. "Whistleblowing System and Fraud Early Warning System on Village Fund Fraud: The Indonesian Experience," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(6), pages 211-217, October.
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    Cited by:

    1. Tarmizi Achmad & Imam Ghozali & Monica Rahardian Ary Helmina & Dian Indriana Hapsari & Imang Dapit Pamungkas, 2022. "Detecting Fraudulent Financial Reporting Using the Fraud Hexagon Model: Evidence from the Banking Sector in Indonesia," Economies, MDPI, vol. 11(1), pages 1-17, December.

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