THE INFLUENCE OF MORALITY, INTERNAL CONTROL ON FRAUD OF FINANCIAL REPORTS

Abstract

Financial statement fraud can occur in companies, involving management in the form of misstatements in financial statements. This condition if left unchecked will be detrimental to investors and creditors. This study aims to determine the effect of morality, internal control on financial statement fraud at PT ABC and PT XYZ. This type of research is quantitative research using primary data distributed through questionnaires. Sampling was carried out using a purposive sampling technique. The sample consists of 31 respondents. Respondents work in the finance department at PT ABC and PT XYZ. The research was conducted in 2022. The questionnaire was processed using the SPSS version 25 program. The analysis was carried out using multiple linear regression, after previously testing the validity and reliability. The results of the study show that morality has a negative and significant effect on fraudulent financial reporting at PT ABC and PT XYZ companies, as well as internal control has a negative and significant effect on financial reporting failure at PT ABC and PT XYZ companies. This research is expected to provide input for companies in controlling fraudulent financial statements by taking into account these factors.