Research Article
Detecting Financial Statement Fraud Using Fraud Triangle and Board of Director’s Attributes Analyses
@INPROCEEDINGS{10.4108/eai.10-8-2022.2320770, author={Arnaldo Purba and Kenny Fernando and I Dewa Gde Agung Windhu Darmaja}, title={Detecting Financial Statement Fraud Using Fraud Triangle and Board of Director’s Attributes Analyses}, proceedings={Proceedings of the 3rd International Conference of Business, Accounting, and Economics, ICBAE 2022, 10-11 August 2022, Purwokerto, Central Java, Indonesia}, publisher={EAI}, proceedings_a={ICBAE}, year={2022}, month={8}, keywords={financial statement fraud fraud triangle board of director’s attributes}, doi={10.4108/eai.10-8-2022.2320770} }- Arnaldo Purba
Kenny Fernando
I Dewa Gde Agung Windhu Darmaja
Year: 2022
Detecting Financial Statement Fraud Using Fraud Triangle and Board of Director’s Attributes Analyses
ICBAE
EAI
DOI: 10.4108/eai.10-8-2022.2320770
Abstract
This study examines whether fraud triangle and board of director’s attributes analyses can detect financial statement fraud in Indonesian listed companies. Financial statement fraud is proxied by Dechow ‘s fraud score model. The fraud triangle analysis includes financial stability, effective monitoring, and rationalization whereas the board of director’s attributes analysis covers number of independent board and board of director’s gender diversity. The unit of analysis is companies listed in KOMPAS100, an index that comprises 100 companies listed in the Indonesian Stock Exchange that have sound liquidity and large market capitalization. The period of the study is 2016 to 2019. The results of the study show that neither of the three aspects fraud triangle nor the two aspects of the board of director’s attributes analysis can detect the financial statement fraud. Such results evidence the extent to which large and liquid Indonesian listed companies have fairly reported their financial statements.
