Proceedings of The 2nd International Conference On Advance And Scientific Innovation, ICASI 2019, 18 July, Banda Aceh, Indonesia

Research Article

Analysis of Factors That Influence Financial Statement Fraud In The Perspective Fraud Triangle: Empirical Study on Banking Companies In Indonesia

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  • @INPROCEEDINGS{10.4108/eai.18-7-2019.2288648,
        author={Rudy  Hartanto and Lasmanah  Lasmanah and Muhammad Ridwan Mustafa and Pupung  Purnamasari},
        title={Analysis of Factors That Influence Financial Statement Fraud In The Perspective Fraud Triangle: Empirical Study on Banking Companies In Indonesia},
        proceedings={Proceedings of The 2nd International Conference On Advance And Scientific Innovation, ICASI 2019, 18 July, Banda Aceh,  Indonesia},
        publisher={EAI},
        proceedings_a={ICASI},
        year={2019},
        month={11},
        keywords={financial statement fraud banking good governance fraud triangle theory},
        doi={10.4108/eai.18-7-2019.2288648}
    }
    
  • Rudy Hartanto
    Lasmanah Lasmanah
    Muhammad Ridwan Mustafa
    Pupung Purnamasari
    Year: 2019
    Analysis of Factors That Influence Financial Statement Fraud In The Perspective Fraud Triangle: Empirical Study on Banking Companies In Indonesia
    ICASI
    EAI
    DOI: 10.4108/eai.18-7-2019.2288648
Rudy Hartanto1,*, Lasmanah Lasmanah1, Muhammad Ridwan Mustafa1, Pupung Purnamasari1
  • 1: Fakultas Ekonomi dan Bisnis Universitas Islam Bandung, Jl. Tamansari 1 Bandung, Indonesia
*Contact email: rudyhartanto05@gmail.com

Abstract

The purpose of this study is to explain the factors that influence fraudulent financial statements in Indonesian banks. This research takes the banking sector into consideration that banking is one of the industries or the most vulnerable institutions for financial incidents due to the many regulations and financial transactions that occur in the banking sector. This study uses banking data from 2014-2017 with a total sample of 90 banks. Data analysis techniques are carried out using multiple regression analysis. The results show that the pressure proxied by external pressure, which is proxied by free cash flow, has a positive effect on fraudulent financial statements, which means that the greater the free cash flow of the banking sector, the greater the likelihood of fraudulent financial statements. Whereas pressure proxied by financial stability, financial targets, and ineffective monitoring and rationalization and good governance have no effect on fraudulent financial statements.