DETECTING FRAUDULENT FINANCIAL REPORTING WITH FINANCIAL INDICATORS
Andrian Budi Prasetyo, Aditya Septiani, Adi Firman Ramadhan
Department of Accounting, Faculty of Economics, Universitas Diponegoro
Abstract
The purpose of this research is to examine the effect of financial ratio to detect fraud in financial reporting in the company. The financial ratio used are leverage, profitability, asset composition, liquidity, and capital turnover ratio. This research was conducted with quantitative methods using secondary data. The secondary data from a list of cases subject to sanctions by the Financial Services Authority (OJK) for the warning category VIII.G.7 regarding the presentation of financial statements in 2008-2015 and the annual reports of companies listed on the IDX. The population of this research is the companies listed on the Stock Exchange, then the samples are taken based on purposive sampling with the criteria of non-financial companies and have the data needed in this research. Fraud companies are then paired with non-Fraud companies with similarities in industry and the size of the companys assets. This research uses logistic regression statistics because the dependent variable is a dummy (non metric) variable, while the independent variable is a metric and non-metric variable. The results of this research are leverage ratios have a positive effect on financial reporting fraud and the capital turnover ratio negatively affects financial reporting fraud . Meanwhile, profitability ratios, asset composition ratios and liquidity ratios have no effect on fraudulent financial reporting.
Keywords: fraud, financial ratio, financial reporting
Topic: Accounting