Analysis Fraud Pentagon Against Financial Statement Fraud with Corporate Governance as A Control Mechanism
DOI:
https://doi.org/10.59890/ijefbs.v4i3.12Keywords:
fraud pentagon, financial statement fraud, corporate governance, Beneish M-Score, healthcare sectorAbstract
This study examines the influence of Fraud Pentagon elements on financial statement fraud in healthcare companies listed on the Indonesia Stock Exchange, while investigating the role of corporate governance as a controlling mechanism. The sample comprises 11 companies with 33 total observations over the 2022–2024 period. A quantitative causal approach was employed, with the Beneish M-Score as the proxy for financial statement fraud and the Good Corporate Governance Score as the governance measure, analyzed through multiple linear regression using SPSS version 25. The findings indicate that financial stability, monitoring effectiveness, auditor change, and director turnover each exert a positive and significant effect on financial statement fraud. Conversely, the frequency of CEO photographs in annual reports does not yield a statistically significant result. Corporate governance demonstrates a negative and significant effect, confirming that stronger governance implementation meaningfully reduces the probability of financial statement manipulation. The model explains 77.4% of the variation in financial statement fraud, affirming that corporate governance constitutes the most effective fraud prevention strategy.
References
Agusputri , H., & Sofie, S. (2019). FACTORS INFLUENCING FRAUDULENT FINANCIAL REPORTING USING PENTAGON FRAUD ANALYSIS. JOURNAL OF INFORMATION, TAXATION, ACCOUNTING, AND PUBLIC FINANCE, 14 (2), 105–124. https://doi.org/10.25105/jipak.v14i2.5049
Aileen, A., & Salim, S. (2025). FRAUD PENTAGON THEORY FOR DETECTING FINANCIAL STATEMENT FRAUD IN BANKING INDUSTRY. International Journal of Application on Economics and Business, 3 (1), 212–223. https://doi.org/10.24912/ijaeb.v3i1.212-223
Chen, N., & Liu, C. (2021). Share repurchases and market signaling: Evidence from earnings management. International Review of Finance, 21(4), 1203–1224. https://doi.org/10.1111/irfi.12321
Dahya, J., & McConnell, J. J. (2007). Board Composition, Corporate Performance, and the Cadbury Committee Recommendation. Journal of Financial and Quantitative Analysis, 42(3), 535–564. https://doi.org/10.1017/S0022109000004099
Devi, P. V. S. (2024). Corporate Governance as a Detector of Financial Statement Fraud: Systematic Literature Review. Asia Pacific Fraud Journal, 9(1), 37–47. https://doi.org/10.21532/apfjournal.v9i1.342
Dwinanda, R. R., & Utama, A. A. G. S. (2025). The Role of Corporate Governance in Financial Fraud Prevention: A Systematic Literature Review. Nominal: Barometer Riset Akuntansi Dan Manajemen, 14(2), 150–163. https://doi.org/10.21831/nominal.v14i2.81860
Fitriyah, R., & Novita, S. (2021). FRAUD PENTAGON THEORY FOR DETECTING FINANCIAL STATEMENT FRAUDULENT. JRAK, 13(1), 20–25. https://doi.org/10.23969/jrak.v13i1.3533
Ghaisani , AA, & Supatmi , S. (2023). Detection Fraud Reporting Finance Using the Fraud Pentagon. Owner, 7 (1), 599–611. https://doi.org/10.33395/owner.v7i1.1233
Hidayat, D. catur , & Triyono, T. (2022). FINANCIAL STATEMENT FRAUD DETECTION USING PENTAGON FRAUD IN MINING COMPANIES LISTED ON THE IDX IN 2018-2020. Journal of Accounting Research Politala , 5 (1), 15–27. https://doi.org/10.34128/jra.v5i1.124
Ibrahim, L., Darwis, H., & Supriatiningsih, S. (2022). GOOD CORPORATE GOVERNANCE MECHANISMS IN REDUCING FRAUD IN GO GREEN COMPANIES IN INDONESIA. JOURNAL OF ACCOUNTING, 11 (2), 248–263. https://doi.org/10.37932/ja.v11i2.687
Ida Ayu Daughter Nichiyobi , & Ni Luh Sari Widhiyani (2025). Evaluating the Fraud Triangle's Predictive Power for Financial Statement Fraud. E- Journal Accounting, 35 (12). https://doi.org/10.24843/EJA.2025.v35.i12.p05
Jaswadi, J., Purnomo, H., & Sumiadji, S. (2024). Financial statement fraud in Indonesia: a longitudinal study of financial misstatement in the pre- and post-establishment of financial services authority. Journal of Financial Reporting and Accounting, 22 (3), 634–652. https://doi.org/10.1108/JFRA-10-2021-0336
Magdalena, R., & Dananjaya, Y. (2021). CEO Capability and CEO Arrogance. International Journal of Scientific Research and Management, 9 (07), 2319–2328. https://doi.org/10.18535/ijsrm/v9i07.em06
Maharani Putri, C., Triyuwono, I., & Virginia Nur Rahmanti. (2025). Financial Statement Quality in the Public Sector: Internal Control over Reporting as a Moderating Factor. Journal Review Accounting and Finance, 15 (3). https://doi.org/10.22219/jrak.v15i3.40578
Mansour, A. Z., Ahmi, A., Popoola, O. M. J., & Znaimat, A. (2022). Discovering the global landscape of fraud detection studies: a bibliometric review. Journal of Financial Crime, 29(2), 701–720. https://doi.org/10.1108/JFC-03-2021-0052
Ndruru, S. A. O., & Hutapea, J. Y. (2022). PENGARUH INEFFECTIVE MONITORING, FINANCIAL STABILITY, DAN CORPORATE GOVERNANCE, TERHADAP FINANCIAL STATEMENT FRAUD. Jurnal Ekonomis, 15(2), 131–151. https://doi.org/10.58303/jeko.v15i2.2989
Ngoc Hung, D., Thuy Van, V. T., & Archer, L. (2023). Factors affecting the quality of financial statements from an audit point of view: A machine learning approach. Cogent Business & Management, 10(1). https://doi.org/10.1080/23311975.2023.2184225
Novita, S., Widyastuti, T., & Darmansyah, D. (2025). The Determinants of Fraudulent Financial Reporting: (A Systematic Literature Review). International Journal of Research and Innovation in Social Science, IX(III), 1042–1055. https://doi.org/10.47772/IJRISS.2025.90300083
Oktarigusta, L. (2017). DIAMOND FRAUD ANALYSIS TO DETECT THE OCCURRENCE OF FINANCIAL STATEMENT FRAUD IN COMPANIES (EMPIRICAL STUDY OF MANUFACTURING COMPANIES LISTED ON THE IDX IN 2012-2015). Journal Management Competitiveness, 19 (2), 93–108. https://doi.org/10.23917/dayasaing.v19i2.5384
Owusu, GMY, Koomson, TAA, Alipoe , SA, & Kani, YA (2022). Examining the predictors of fraud in state-owned enterprises: an application of the fraud triangle theory. Journal of Money Laundering Control, 25 (2), 427–444. https://doi.org/10.1108/JMLC-05-2021-0053
Permatasari, M., & Yulianti, V. (2025). Green Accounting as a Sustainability Mechanism Moderating Financial Statement Fraud in the Fraud Pentagon Context. Journal of Applied Accounting and Taxation, 10(2), 193–205. https://doi.org/10.30871/jaat.v10i2.11061
Pradipta, A. N., & Putra, R. A. (2025). The Influence of Digital Financial Reporting on Transparency Quality: A Signaling Theory Approach. Jurnal Ilmiah Manajemen, Ekonomi Dan Bisnis, 4(1), 19–28. https://doi.org/10.51903/yaf6m538
Rahmadania, R., Susilawati, S., Suryaningsih, M., & Yuli, R. (2026). Pentagon Fraud Model and Financial Statement Fraud: The Moderating Role of the Audit Committee. International Journal of Business, Law, and Education, 7(1), 412–425. https://doi.org/10.56442/ijble.v7i1.1383
Rahmatika, D. N., Kartikasari, M. D., Indriasih, D., Sari, I. A., & Mulia, A. (2019). Detection of Fraudulent Financial Statement; Can Perspective of Fraud Diamond Theory be applied to Property, Real Estate, and Building Construction Companies in Indonesia? European Journal of Business and Management Research, 4(6). https://doi.org/10.24018/ejbmr.2019.4.6.139
Randi, PF, & Faradiza, SA (2022). Fraud Detection in Financial Statements Finance through Narcissism, CEO Politicians and Ownership Managerial Accountability, 15 (2), 155–168. https://doi.org/10.15408/akt.v15i2.28833
Shahana, T., Lavanya, V., & Bhat, A. R. (2023). State of the art in financial statement fraud detection: A systematic review. Technological Forecasting and Social Change, 192, 122527. https://doi.org/10.1016/j.techfore.2023.122527
sugiyono. (2018). Metode Penelitian Kuantitatif, Kualitatif, dan R&D.
Tjen, F., Sitorus, T., & Chasanah, R. N. (2020). Financial Stability, Leverage, Ineffective Monitoring, Independent Audit Committee, and the Fraudulent Financial Statement. International Research Journal of Business Studies, 13(2), 161–172. https://doi.org/10.21632/irjbs.13.2.161-172
Yosef, M. C., & Sumarna, A. D. (2024). The Fraud Pentagon Analysis in Financial Companies on The Indonesia Stock Exchange. Moneter: Jurnal Keuangan Dan Perbankan, 12(3), 556–567. https://doi.org/10.32832/moneter.v12i3.1080
Yuvin, V., & Sormin, P. (2022). THE EFFECT OF PENTAGON FRAUD AND CORPORATE GOVERNANCE ON FINANCIAL STATEMENT FRAUD BENEISH MODEL. Journal Contemporary Accounting, 2 (1), 41. https://doi.org/10.24912/jka.v2i1.18124
