Pressure and Opportunity Factors in Financial Statement Fraud Detection with Family Companies as Moderators
(Pages 1332-1341)Abdul Manan1*, Imam Ghozali2, Tri Jatmiko Wahyu Prabowo3
1Doctoral Student, Faculty of Economics & Business, Universitas Diponegoro, Jalan Erlangga Tengah No.17, Semarang City, Central Java 5024, Indonesia.
2,3Faculty of Economics & Business, Universitas Diponegoro, Jalan Prof. Moeljono Trastotenojo, Tembalang, Semarang City, Central Java 50275 Indonesia.
DOI: https://doi.org/10.55365/1923.x2023.21.145
Abstract:
This study investigates how family companies, as a moderating variable, can strengthen or weaken fraud detection in the financial statements presented. The pressure and opportunity factors used in detecting fraudulent financial statements. Using the purposive sampling method, the samples used in the study were companies in the manufacturing sector listed on the IDX for the 2018-2020 period. The data analysis method in this study uses multiple linear regression analysis and moderated regression analysis (MRA). The results of this study use two factors that trigger fraud: leverage for external proxy pressure and ineffective monitoring for a proxy opportunity. The leverage variable affects financial statement fraud. In comparison, the ineffective variable monitoring of the independent board of commissioners does not affect fraudulent financial reporting. For ineffective monitoring, institutional ownership significantly negatively affects fraudulent financial reporting. The family firm variable cannot moderate the effect of leverage and ineffective monitoring on the independent board of commissioners and institutional ownership on fraudulent financial reporting. This indicates that family share ownership cannot strengthen leverage and ineffective monitoring because of the independent board of commissioners who serve as supervisors. This study offers important insights for family companies in detecting fraudulent financial statements, namely external pressure needs to be an essential factor that is considered. Meanwhile, ineffective monitoring is directed at the composition of the board of commissioners, and institutional ownership needs to be enlarged to put pressure on company managers.
Keywords:
External Pressure; Ineffective Monitoring; Family Firm; Financial Reporting Fraud.
JEL Classification:
G21; G34; G38; M42.
How to Cite:
Abdul Manan, Imam Ghozali, Tri Jatmiko Wahyu Prabowo. Pressure and Opportunity Factors in Financial Statement Fraud Detection with Family Companies as Moderators. [ref]: vol.21.2023. available at: https://refpress.org/ref-vol21-a145/
Licensee REF Press This is an open access article licensed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/3.0/) which permits unrestricted, non-commercial use, distribution and reproduction in any medium, provided the work is properly cited.