Fraud Diamond Analysis in Detecting Fraudulent Financial Reporting (Study on Indonesian Capital Market)

  • Ni Luh Putu Uttari Premananda Faculty of Economic and Business, Udayana University, Bali, Indonesia
  • I Ketut Budiartha Faculty of Economic and Business, Udayana University, Bali, Indonesia
  • Herkulanus Bambang Suprasto
  • I Dewa Nyoman Badera
Keywords: Fraud diamond, fraudulent financial reporting, non-financial company.

Abstract

This study aims to detect fraudulent financial reporting using diamond fraud analysis. Fraudulent financial reporting includes intentional errors, like the removal of an amount or disclosure in financial statements to influence the perceptions of users of financial statements. The fraud diamond theory developed by Wolfe and Hermanson in 2004 included pressure, opportunity, rationalization, and capability. This study uses secondary data. The population in this study were all non-financial companies listed on the Indonesia Stock Exchange in 2015-2017. The analysis technique used is factor analysis and multiple linear regression analysis. The test results prove that pressure, rationalization, and capability are able to predict fraudulent financial reporting. While the opportunity is not able to predict fraudulent financial reporting.

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Published
2019-07-17
Section
Articles