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Detecting financial statement fraud through new fraud diamond model: the case of Indonesia

Detecting financial statement fraud through new fraud diamond model: the case of Indonesia The purpose of this paper is to evaluate the effect of the new fraud diamond model in explaining financial statement fraud.Design/methodology/approachThe variables used to examine the factors consist of motivation, opportunity, personal integrity and capability. This research used manufactured companies listed in the Indonesia Stock Exchange of the 2015–2019 period as the population.FindingsThere has been a positive influence between personal financial need (OSHIP), nature of the industry (RECEIVABLE) and history of sale (SG) toward financial statement fraud, while the negative effect is found only in the effective monitoring (IND).Research limitations/implicationsThe new fraud diamond model theory which is used as a reference in this study is a new and under-developed theory. So the author suggests that further research on this theory be carried out to strengthen the new fraud diamond model theory and ensure whether it can be used as a reference to find out the causes of financial statement fraud. In addition, the object used in this study is limited to manufacturing companies, so the author suggests that further research combine several types of companies.Originality/valueThe research finding supports the new fraud diamond model theory in elaborating the financial statement fraud phenomenon. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Financial Crime Emerald Publishing

Detecting financial statement fraud through new fraud diamond model: the case of Indonesia

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References (35)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1359-0790
eISSN
1359-0790
DOI
10.1108/jfc-06-2021-0118
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to evaluate the effect of the new fraud diamond model in explaining financial statement fraud.Design/methodology/approachThe variables used to examine the factors consist of motivation, opportunity, personal integrity and capability. This research used manufactured companies listed in the Indonesia Stock Exchange of the 2015–2019 period as the population.FindingsThere has been a positive influence between personal financial need (OSHIP), nature of the industry (RECEIVABLE) and history of sale (SG) toward financial statement fraud, while the negative effect is found only in the effective monitoring (IND).Research limitations/implicationsThe new fraud diamond model theory which is used as a reference in this study is a new and under-developed theory. So the author suggests that further research on this theory be carried out to strengthen the new fraud diamond model theory and ensure whether it can be used as a reference to find out the causes of financial statement fraud. In addition, the object used in this study is limited to manufacturing companies, so the author suggests that further research combine several types of companies.Originality/valueThe research finding supports the new fraud diamond model theory in elaborating the financial statement fraud phenomenon.

Journal

Journal of Financial Crime – Emerald Publishing

Published: May 24, 2022

Keywords: Financial statement fraud; Indonesia Stock Exchange; History of sale; Nature of industry; New fraud diamond model; Personal financial needs

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