Factors that Influence Fraudulent Financial Statements in Retail Companies - Indonesia

Rian Ferdinand, Setyarini Santosa

Abstract


Fraudulent financial statements is an intentionally misstatement of the financial statements. There are several factors affected the evidence of fraudulent financial statements report. The objective of this research is to investigate the influence of audit committee characteristics, managerial ownership, leverage, and liquidity toward the fraudulent financial statements report in retail companies listed on the Indonesia Stock Exchange in the period of 2012-2016. Using regression, the result shows that audit committee characteristic and leverage do not have significant effect on the fraudulent financial statements report, while managerial ownership and liquidity have. Simultaneously, audit committee characteristics, managerial ownership, leverage and liquidity have significant influence to the fraudulent financial statement report.

Full Text:

PDF

References


ACFE, A. (2017). Retrieved from Fraud Examiner Manual: http://www.acfe.com/fem-lp.aspx

Arens, A. A., Elder, R. J., & Beasley, M. S. (2012). Auditing and Assurance Services: An Integrated Approach. Harlow, England: Pearson Education.

Armein, R. A. (2005). Analisis Kasus Laporan Keuangan PT Indofarma. Law Review Fakultas Hukum Universitas Pelita Harapan, IV(3), 293-247.

Bardos, K. S. (2011). Qualitif of Financial Information and Liquidity. Review of Financial Economics, 20(2), 49-62. doi:10.1016/j.rfe.2011.01.001

Beneish, M. D. (1999). The Detection of Earnings Manipulations. Financial Analysis Journal, 55(5), 24-36. doi:10.2469/faj.v55.n5.2296

Dalnial, H., Kamaluddin, A., Sanusi, Z. M., & Khairuddin, K. S. (2014). Accountability in Financial Reporting: Detecting Fraudulent Firms. Procedia-Social and Behavioral Sciences, 145, 61-69. doi:10.1016/j.sbspro.2014.06.011

Dang, C., & Li, Z. F. (2013). Measuring Firm Size in Empirical Corporate Finance. SSRN Electronic Journal. doi:10.2139/ssrn.2345506

Dani, R. M., Wan Ismail, W. A., & Kamarudin, K. A. (2013). Can Financial Ratios Explain the Occurence of Fraudulent Financial Statements? Proceeding Global Trends in Financial Crimes in the New Economies. Selangor Malaysia: The 5th International Conference on Financial Criminology (ICFC).

Deloitte-India. (2015). Audit, Consulting, Financial Advisory, Risk Advisory, Tax services. Retrieved from http://www.deloitte.com/in

Goel, U., Chadha, S., & Sharma, A. K. (2015). Operating Liquidity and Financial Leverage: Evidences from India Machinery Industry. Procedia-Social and Behavioral Sciences, 189, 344-350. doi:10.1016/j.sbspro.2015.03.230

Hoag, M., Myring, M., & Schroeder, J. (2017). Has Sarbanes-Oxley Standardized Audit Quality? American Journal of Business, 32(1), 2-23. doi:10.1108/ajb-05-2015-0016

Jensen, M. C., & Meckling, W. H. (1976). Theory of the Firm: Managerial Behavior, Agency Cost and Ownership Structure. Journal of Financial Economic, 3(4), 305-360. doi:10.1016/0304-405x(76)90026-x

Kent, P., Routledge, J., & Steward, J. D. (2010). Innate and Discretionary Accruals Quality and Corporate Governance. Accounting and Finance, 50(1), 171-195. doi:10.1111/j.1467-629x.2009.00321.x

Li, Y., Rocheteau, G., & Weill, P. O. (2011, October 3). Liquidity and the Threat of Fraudulent Assets. FRB Cleveland Working Paper, (11-24). Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1937771

Little, A. T. (2012). Elections, Fraud and Election Monitoring in the Shadow of Revolution. Quarterly Journal of Political Science, 249-283. doi:10.1561/100.00011078

Martantya, R. M., & Daljono. (2013). Pendeteksian Kecurangan Laporan Keuangan Melalui Faktor Resiko, Tekanan dan Peluang (Studi Kasus pada Perusahaan Yang Mendapat Sanksi Bapepam 2002-2006). Diponegoro Journal of Accounting, 2(2), 1-12. Retrieved from http://id.portalgaruda.org/index.php?ref=browse&mod=viewarticle&article=121360

Nia, S. H. (2015). Financial Ratio between Fraudulent and Non-Fraudulent Firms: Evidencefrom Tehran Stock Exchange. Journal of Accounting and Taxation, 7(3), 38-44. doi:10.5897/JAT2014.0166

Nobanee, H., Abdullatif, M., & AlHajjar, M. (2011). Cash Conversion Cycle and Firm's Performance of Japanese Firms. Asian Review of Accounting, 19(2), 147-156. doi:10.1108/13217341111181078

OJK, F. (2015). Decree No 55/PJOK.04/2015 : Establishment and Implementation Guidelines of the Audit Committee.

Omoye, A. S., & Eragbhe, E. (2014). Accounting Ratios and False Financial Statements Detection: Evidence from Nigerian Quoted Companies. International Journal of Business and Social Sciences, 5(7), 206 - 215. doi:10.5901/mjss.2014.v5n20p614

Owen-Jackson, L. A., Robinson, D., & Shelton, S. W. (2009). The Association between Audit Committee Characteristics, the Contracting Process and Fraudulent Financial Reporting. American Business Law Journal, 24(2), 57-65. doi:10.1108/19355181200900005

Ozcan, A. (2016). Firm Characteristics and Accounting Fraud: A Multivariate Approach. Journal of Accounting Finance and Auditing Studies, 128-144.

Prajanto, A., & Pertiwi, R. D. (2016). The Impact of Corporate Cultures and Financial Ratios on the Fraudulent Financial Reporting. Jurnal Dinamika Akuntansi, 8(1), 39-52. Retrieved from http://journal.unes.ac.id/nju/index.php/jda

Prijanto, A., & Pratiwi, R. D. (2017). The Impact of Corporate Cultures and Financial Ratios on the Fradulent Financial Reporting. Journal of Accounting Dynamics. doi:10.15294/jda.v8i1.9120

Siahaan, F. O. (2013). The Effect of Investment Opportunity Set, the Presence of Audit Committee, the Composition of Independent Commissioner and Managerial Ownership on Profit Quality. International Journal of Business and Social Science, 4(9), 210 - 216.

Smith, M. (2017). Research Methods in Accounting (4th ed.). London: SAGE Publications, Ltd.

Sulistiawan, D., Januarsi, Y., & Alvia, L. (2011). Creative Accounting: Mengungkapkan Manajemen Laba dan Skandal Akuntansi. Jakarta: Salemba Empat.

Tarjo, & Herawati, N. (2015). Application of Beneish M-Score Models and Data Mining to Detect Financial Fraud. Procedia-Social and Behavioral Sciences, 924-930. doi:10.1016/j.sbspro.2015.11.122

Vlaminck, N. D., & Sarens, G. (2013). The Relationship Between Audit Committee Characteristics and Financial Statement Quality. Journal of Management and Governance, 19(1), 145-166. doi:10.1007/s10997-013-9282-5

Wang, Y. J. (2002). Liquidity management, operating performance, and corporate value: evidence from Japan and Taiwan. Journal of Multifinancial Management, 12(2), 159 - 169. doi:10.1016/S1042-444X(01)00047-0

Zainudin, E. F., & Hashim, H. A. (2016). Detecting Fraudulent Financial Reporting using Financial Ratio. Journal of Financial Reporting and Accounting, 14(2), 266 - 278. doi:10.1108/JFRA-05-2015-0053

Zamri, N., Rahman, R. A., & Isa, N. M. (2013). The Impact of Leverage on Real Earnings Management. Procedia Economics and Finance, 7, 86-95. doi: The Impact of Leverage on Real Earnings Management




DOI: http://dx.doi.org/10.33021/jaaf.v2i2.548

Refbacks

  • There are currently no refbacks.


Mailing Address

Jl. Ki Hajar Dewantara, Kota Jababeka, Cikarang Baru, Bekasi 17550 - Indonesia

Mail Address

jaaf@president.ac.id

 

ISSN 2580-1791 (Print)

ISSN 2615-8051 (Online)

View My Stats

flag

 

---------------------------------------------------------------------------------------------------------------------------------------------------

JAAF (Journal of Applied Accounting and Finance) is indexed in: