Potential of Fraud Financial Statements: The Fraud Triangle

  • Herzalina Herbenita Universitas Muhammadiyah Yogyakarta, Indonesia
  • Alni Rahmawati Universitas Muhammadiyah Yogyakarta, Indonesia
  • Arni Surwanti Universitas Muhammadiyah Yogyakarta, Indonesia
DOI: https://doi.org/10.17605/cajitmf.v3i10.344
Keywords: Fraud Triangle Theory, Pressure, Opportunity, Rationalization, Fraudulent Financial Reporting

Abstract

This study aims to examine and analyze the effect of financial stability, financial target, personal financial need, external Pressure, Opportunity, and rationalizations on financial statement fraud in manufacturing companies in Indonesia in 2016 - 2020. This study uses a quantitative approach. The independent variables in this study consist of financial stability, financial target, personal financial need, external Pressure, Opportunity, and rationalization, while the dependent variable is financial statement fraud. The population in this study were manufacturing companies listed on the Indonesia Stock Exchange in the period 2016 - 2020. The sampling technique used was purposive sampling, so 189 data were obtained, and 61 manufacturing industry companies with the data type were secondary data. The analytical tool used is logistic regression supported by EViews 12 software. The results of this study indicate that financial stability, financial targets, and personal financial needs significantly affect fraudulent financial statements. In contrast, external Pressure, Opportunity, and rationalization have no considerable effect on fraudulent financial reports. This research has implications for policymaking by company management to make quality financial reports and minimize fraud.

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Published
2022-10-29
How to Cite
Herbenita, H., Rahmawati, A., & Surwanti, A. (2022). Potential of Fraud Financial Statements: The Fraud Triangle. Central Asian Journal of Innovations on Tourism Management and Finance, 3(10), 201-212. https://doi.org/10.17605/cajitmf.v3i10.344
Issue
Vol. 3 No. 10 (2022): October 2022
Section
Articles

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