Fraud Diamond Analysis in Detecting Fraudulent Financial Statement

Abstract

Fraudulent financial statement is the least common fraud but has the greatest loss of impact compared to other types of fraud. This certainly can make mistakes in terms of decision making. This study aims to analyze fraudulent financial statements in the perspective of diamond fraud in the form of pressure, opportunity, rationalization, and capability. The sampling technique in this study was using purposive sampling technique, which obtained 175samples consisting of 35 properties, real estate, and construction companies listed on the Indonesia Stock Exchange in 2013-2017. Panel data regression analysis is analytical technique that used in this study using EVIEWS 9 software. Furthermore, the result of the study shows that the independent variables such as financial stability, external pressure, financial target, nature of industry, ineffective monitoring, change in auditor, audit opinion, change in director has a simultaneous effect on the dependent variable fraudulent financial statement. While partially, the financial target, nature of industry, ineffective monitoring variables have a significant positive effect on the fraudulent financial statement, and for external pressure, financial stability, , change in auditor, audit opinion and change in director have no influence on the fraudulent financial statement.

Keywords

• Pressure
• Opportunity
• Rationalization
• Capability
• Fraudulent Financial Statement