Factors Affecting Fraud in Financial Reports with the Fraud Triangle Perspective in SOE Companies on the Indonesia Stock Exchange

Abstract

This study aims to analyze the factors that can trigger fraudulent financial reporting from the Fraud Triangle Theory perspective. The Fraud Triangle Theory explains that 3 factors can trigger fraud: pressure, opportunity, and rationalization. The variables of financial stability, external pressure, managerial ownership, financial targets, nature of the industry, ineffective monitoring, organizational structure, and rationalization explain these factors. This research was conducted at BUMN companies listed on the Indonesia Stock Exchange in 2017-2021, consisting of 21 companies. The sampling method is saturated sampling, so all populations are used in this study. The data type used is secondary data, with the data analysis technique of multiple linear regression tests using the EViews software tool. The results of this study indicate that Financial Stability has a positive and significant effect on Fraud Financial Reporting, Financial Targets, and the Nature of Industry have a negative and significant effect on Fraud Financial Reporting. At the same time, Managerial Ownership, Ineffective Monitoring, Structure Organization, and Rationalization do not affect financial statement fraud. Keywords: Fraud Financial Reporting, Fraud Triangle