A MODERATION INSTITUTIONAL OWNERSHIP IMPACT ON FRAUDULENT FINANCIAL REPORTING: FRAUD PENTAGON THEORY PERSPECTIVE
Abstract
This study aims to evaluate the effect of the elements in the Fraud Pentagon theory, namely pressure, opportunity, rationalization, capability, and arrogance, on fraudulent financial reporting. This research method uses the F-score model to identify potential fraud in financial statements. The research data were obtained from the annual reports of companies engaged in the financial sector and listed on the Indonesia Stock Exchange (IDX) in the 2019-2023 period. By using a purposive sampling technique, 104 samples were obtained. Data analysis was carried out using the panel data analysis method through Eviews software version 12. The results of the analysis show that pressure has a significant effect on fraudulent financial reporting. However, the opportunity, rationalization, capability, and arrogance variables do not show a significant effect. In addition, institutional ownership is not proven to moderate the relationship between the elements of the Fraud Pentagon and fraudulent financial reporting. This study reveals that financial sector companies listed on the IDX tend to face the risk of fraud in financial reporting when under pressure to manipulate. limitations in this study, limited in its population, which only focuses on financial sector companies in Indonesia.
References
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Satata, D. P. I., Pamungkas, I. D., Sumaryati, A., & Minarso, B. (2024). The Role of Institutional Ownership in Detecting Fraudulent Financial Reporting: Fraud Heptagon Model Analysis. MAKSIMUM, 14(1), 37. https://doi.org/10.26714/mki.14.1.2024.37-47
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Surepno, Vahaya, B. T., Andriani, A., & Marpaung, M. (2021). Fraud Pentagon and Fraudulent Financial Reporting in Jakarta Islamic Index. Vol. 14 (1) 2021 PP. 143-160. DOI : 10.21043/iqtishadia.v14i1.12374
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Vousinas, G. L. (2019). Advancing theory of fraud: The S.C.O.R.E. model. Journal of Financial Crime, 26(1), 372–381. https://doi.org/10.1108/JFC-12-2017-0128
Wulandari, R., & Maulana, A. (2022). Institutional Ownership as Moderation Variable of Fraud Triangle on Fraudulent Financial Statement. Jurnal ASET (Akuntansi Riset), 14(2), 207–222. https://doi.org/10.17509/jaset.v14i2.44183
ACFE Indonesia. (2020). Survei Fraud Indonesia 2019. Jakarta:ACFE Indonesia Chapter.
Achmad, T., Ghozali, I., & Pamungkas, I. D. (2022). Hexagon Fraud: Detection of Fraudulent Financial Reporting in State-Owned Enterprises Indonesia. Economies, 10(1), 13. https://doi.org/10.3390/economies10010013
Achmad, T., Hapsari, D. I., & Pamungkas, I. D. (2022). Analysis of Fraud Pentagon Theory to Detecting Fraudulent Financial Reporting using F-Score Model in State-Owned Companies Indonesia. WSEAS TRANSACTIONS ON BUSINESS AND ECONOMICS, 19, 124–133. https://doi.org/10.37394/23207.2022.19.13
Achmada, T., Ghozali, I., Pamungkas, I. D., & Nuswantoro, U. D. (2020). Detection of Academic Dishonesty: A Perspective of the Fraud Pentagon Model. International Journal of Innovation, 13(12).
Anisykurlillah, I., Ardiansah, M. N., & Nurrahmasari, A. (2023). Fraudulent Financial Statements Detection Using Fraud Triangle Analysis: Institutional Ownership as A Moderating Variable. Accounting Analysis Journal, 11(2), 138–148. https://doi.org/10.15294/aaj.v11i2.57517
Avortri, C., & Agbanyo, R. (2020). Determinants of management fraud in the banking sector of Ghana: The perspective of the diamond fraud theory. Journal of Financial Crime, 28(1), 142–155. https://doi.org/10.1108/JFC-06-2020-0102
CNBC, I. (2018). Drama Bank Bukopin: Kartu Kredit Modifikasi dan Rights Issue.
https://www.cnbcindonesia.com/market/20180427144303-17-12810/drama-bank-bukopin-kartu-kredit-modifikasi-dan-rights-issue
Ghozali, I., & Achmad, T. (2019). DETERMINANTS OF FRAUDULENT FINANCIAL REPORTING AND WHISTLEBLOWING SYSTEM: APPLYING THEORY OF PLANNED BEHAVIOR. 16.
Handoko, B. L., Lindawati, A. S. L., & Vienna, M. (2020). Fraud Pentagon Model for Detecting Fraudulent Financial Reporting in Banking Sector. International Journal of Recent Technology and Engineering (IJRTE), 8(6), 2832–2838. https://doi.org/10.35940/ijrte.F8380.038620
Hugo, J. (2019). EFEKTIVITAS MODEL BENEISH M-SCORE DAN MODEL F-SCORE DALAM MENDETEKSI KECURANGAN LAPORAN KEUANGAN. Jurnal Muara Ilmu Ekonomi dan Bisnis, 3(1), 165. https://doi.org/10.24912/jmieb.v3i1.2296
Indriaty, L., & Thomas, G. N. (2023). Analysis of Hexagon Fraud Model, the S.C.C.O.R.E Model Influencing Fraudulent Financial Reporting on State-Owned Companies of Indonesia. ECONOMICS, 11(s1), 73–92. https://doi.org/10.2478/eoik-2023-0060
Michael C. Jensen, & Meckling, W. H. (1976). Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economic, 3(4), 305–360.
Muchran, M., Irawati, F., & Razak, L. A. (2023). THE EFFECT OF PRESSURE AND OPPORTUNITY IN DETECTING FINANCIAL STATEMENT FRAUDS IN CONSUMER GOODS INDUSTRY COMPANIES. AJAR, 6(01), Article 01. https://doi.org/10.35129/ajar.v6i01.398
Ozcelik, H. (2020). An Analysis of Fraudulent Financial Reporting Using the Fraud Diamond Theory Perspective: An Empirical Study on the Manufacturing Sector Companies Listed on the Borsa Istanbul. In S. Grima, E. Boztepe, & P. J. Baldacchino (Eds.), Contemporary Studies in Economic and Financial Analysis (pp. 131–153). Emerald Publishing Limited. https://doi.org/10.1108/S1569-375920200000102012
Pamungkas, Ghozali, Achmad, T., Khaddafi, & Hidayah. (2018). Corporate governance mechanisms in preventing accounting fraud: A study of fraud pentagon model. 13(2), 549-560.
Pramono Sari, M., Kiswanto, Rahmadani, L. V., Khairunnisa, H., & Pamungkas, I. D. (2020). DETECTION FRAUDULENT FINANCIAL REPORTING AND CORPORATE GOVERNANCE MECHANISMS USING FRAUD DIAMOND THEORY OF THE PROPERTY AND CONSTRUCTION SECTORS IN INDONESIA. Humanities & Social Sciences Reviews, 8(3), 1065–1072. https://doi.org/10.18510/hssr.2020.83109
Pratami, S. R., Widowati, Y. S., & Prapti, L. (2019). Influence Of Fraud Pentagon Toward Fraudulent Financial Reporting In Indonesia An Empirical Study On Financial Sector Listed In Indonesian Stock Exchange. 8(08), 237–242.
Rohmatin, B. L., Apriyanto, G., & Zuhroh, D. (2021). The Role of Good Corporate Governance to Fraud Prevention: An analysis based on the Fraud Pentagon. Jurnal Keuangan Dan Perbankan, 25(2), 280–294. https://doi.org/10.26905/jkdp.v25i2.5554
Satata, D. P. I., Pamungkas, I. D., Sumaryati, A., & Minarso, B. (2024). The Role of Institutional Ownership in Detecting Fraudulent Financial Reporting: Fraud Heptagon Model Analysis. MAKSIMUM, 14(1), 37. https://doi.org/10.26714/mki.14.1.2024.37-47
Situngkir, N. C., & Triyanto, D. N. (2020). Detecting Fraudulent Financial Reporting Using Fraud Score Model and Fraud Pentagon Theory: Empirical Study of Companies Listed in the LQ 45 Index. The Indonesian Journal of Accounting Research, 23(03). https://doi.org/10.33312/ijar.486
Surepno, Vahaya, B. T., Andriani, A., & Marpaung, M. (2021). Fraud Pentagon and Fraudulent Financial Reporting in Jakarta Islamic Index. Vol. 14 (1) 2021 PP. 143-160. DOI : 10.21043/iqtishadia.v14i1.12374
Umarsono, U. (1970). Efektivitas Fraud Triangle dalam Mendeteksi Manajemen Laba Akrual Berbasis SAS NO. 99 pada Perusahaan Penanaman Modal Asing. Jurnal Riset Akuntansi & Perpajakan (JRAP), 3(02), 225–237. https://doi.org/10.35838/jrap.2016.003.02.18
Vousinas, G. L. (2019). Advancing theory of fraud: The S.C.O.R.E. model. Journal of Financial Crime, 26(1), 372–381. https://doi.org/10.1108/JFC-12-2017-0128
Wulandari, R., & Maulana, A. (2022). Institutional Ownership as Moderation Variable of Fraud Triangle on Fraudulent Financial Statement. Jurnal ASET (Akuntansi Riset), 14(2), 207–222. https://doi.org/10.17509/jaset.v14i2.44183
Published
2025-10-16
How to Cite
YUSUF, Fatkhur Avi; ROCHAYATUN, Sulis; KARTIKASARI, Nungki.
A MODERATION INSTITUTIONAL OWNERSHIP IMPACT ON FRAUDULENT FINANCIAL REPORTING: FRAUD PENTAGON THEORY PERSPECTIVE.
Proceedings of the International Conference of Islamic Economics and Business (ICONIES), [S.l.], v. 11, n. 1, p. 583-596, oct. 2025.
ISSN 2541-3333.
Available at: <https://conferences.uin-malang.ac.id/index.php/iconies/article/view/3440>. Date accessed: 20 apr. 2026.
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Articles
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