Journal of Applied Finance and Accounting

EXPLORING FACTORS AFFECTING FRAUDULENT FINANCIAL REPORTING USING PENTAGON THEORY

2024-11-30T06:33:14+00:00

This research aims to prove empirical evidence of the influence of fraudulent financial reporting factors with the fraud pentagon model approach, such as Pressure (financial targets, financial stability, external pressure), Opportunity (ineffective monitoring, nature of industry), Rationality (the change of auditors), Capability (change of directors) and Arrogance (the number of CEO’s picture) on fraudulent financial reporting. The sample method of this study used purposive sampling method and produces 213 data or 71 manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2018 to 2021. The data has been obtained then analyzed using the multiple regression method.. The results of this study prove that external pressure and change of directors has effect on fraudulent financial reporting, while financial targets, financial stability, ineffective monitoring, nature of industry, the change of auditors (KAP), and the number of CEO’s picture have no influence on fraudulent financial reporting. The results of this study have implications for the theory of fraudulent financial reporting by investigating fraud indicators in CrowI's fraud theory or strengthening the Pentagon Fraud Theory. Practical implications, this study has significant implications for auditors, regulators, creditors and shareholders. The findings indicate that external pressure (leverage) and capability (change of directors) can be used to detect fraud in financial statements.

THE ROLE OF POLITICAL CONNECTIONS IN MODERATING THE EFFECT OF BOARD DIVERSITY ON FINANCIAL DISTRESS

2024-12-15T21:15:47+00:00

This research aims to examine the role of political connection in moderating the effect of board gender diversity and board size on financial distress. A sample of 46 banking companies listed in Indonesia Stock Exchange between during the 2021-2023 period was selected using a purposive sampling method. Panel data regression were used for data analysis. The results of the research exhibit that board of commissioner gender diversity has no effect on financial distress; board of director gender diversity has a positive effect on financial distress; and board size has a negative effect on financial distress. Political connections cannot moderate the effect of gender diversity, but can moderate the negative effect of gender diversity and the positive effect of board size on financial distress. This finding, as such, can provide insights for corporate management and regulators to determine the most effective corporate board design to improve the companies financial performance and avoid financial distress.

Keywords: Board diversity; board size; corporate governance; political connection; financial distress

EXAMINING BOARD CHARACTERISTICS AND INTEGRATED REPORTING QUALITY: INSIGHT FROM ESG-FOCUSED FIRMS IN INDONESIA

2024-11-25T10:08:49+00:00

This research aims to look at Indonesian firms and see whether there's a connection between board traits and the quality of their integrated reporting. This study analyzes 52 listed firms from the environmental, social, and governance (ESG) index between 2019 and 2022 using linear regression with panel data to test its assumptions. The data was acquired from annual reports of Indonesian corporations. The acquired empirical data clearly shows that gender diversity appears to significantly improve the integrated reporting quality. Also noteworthy is that board size, independence, and CEO duality are not significantly related. This study has several practical implications in addition to its theoretical implications. Managers, shareholders, and policymakers should take note of these findings, as they are particularly relevant. Therefore, stakeholders should evaluate the precision of disclosure when deciding on the best reporting approach. A more accurate assessment of risk, less stock volatility, more long-term value for shareholders, and an improved company reputation are all outcomes of this. Corporate social responsibility and sustainability literature is lacking, which this article seeks to remedy. It fills a gap in the literature by providing more information about ESG company-specific integrated reporting and corporate governance. This study has important implications for professionals and practitioners who want to raise the bar on the quality of their integrated reports.

A BIBLIOMETRIC ANALYSIS OF BOARD DIVERSITY: RESEARCH TRENDS, CHALLENGES, AND FUTURE DIRECTIONS

2024-11-19T03:18:15+00:00

Board diversity has become a central issue in corporate governance, with growing recognition of its potential benefits for organizational performance, decision-making, and stakeholder engagement. This paper explores the concept of board diversity, examining various dimensions such as gender, ethnicity, age, and professional background. This study examines the evolution of board diversity, significant trends, and research gaps in current literature through bibliometric analysis. This study employs bibliometric analysis to identify the key areas of research, countries, languages, starting years, top journals, and prolific authors in board diversity. Using (Scopus.Com, n.d.) as the data source, 832 records published between 2016 and 2024 with the keyword "Board Diversity" were analyzed. This research utilized The VOS Viewer software for data analysis. This study implies that the bibliometric analysis highlights essential research gaps and trends, provides a thorough picture of the topic, and points out areas that need more investigation, especially the relationship between corporate success, sustainability, and board diversity. This can direct future studies and give academics and professionals a greater understanding of the strategic value of diverse boards. The results also highlight the regional distribution of research, identifying unexplored areas that can profit from targeted investigations. Ultimately, this study is a valuable tool for anyone wishing to learn more about the changing dynamics of board diversity and how it broadly affects corporate governance.

DETERMINANT FACTORS OF FINANCIAL REPORTING QUALITY IN LOCAL GOVERNMENT: THE EVIDENCE FROM PUBLIC SECTOR IN INDONESIA

2024-11-25T10:06:50+00:00

This study aims to examine the effects of spending plan composition elements, regional wealth, local government features, and the characteristics of regional government leaders on the quality of local government financial reports in Indonesia, as well as the moderating effect of financial performance. The research utilized Multinomial Logistic Regression with Pooled Data for hypothesis testing. This analysis draws on 1089 Regional Government Financial Reports from around Indonesia in 2021-2023.We utilize the audit opinion type as an indicator of reporting quality, where an unqualified opinion signifies the highest level of quality, and a disclaimer of opinion indicates the lowest quality. Two ratios were developed based on the financial budget by local government to measure financial performance, which are the Routine Ability Index Ratio (RAIR) and Budget Effectiveness Ratio (BER). The findings of this study, the regional wealth factor, and the proficiency of regional government officials affect the quality of regional financial reporting (FRQ). This research has implications for central government policies in examining the quality of regional financial reporting. The first implication of this study reveals that the wealthier a regional government is, the higher the quality of its financial reporting tends to be. Second, a leader’s years of experience in governing a region influence the quality of his regional financial report. This implies a longer leadership period influences better performance.

EXPLORING THE FACTORS THAT INFLUENCE INDONESIAN AUDITORS' INTENTION TO USE BIG DATA ANALYTICS: APPLICATION OF THE UTAUT MODEL WITH PERCEIVED RISK AND TRUST

2024-11-30T07:40:38+00:00

The adoption of Big Data Analytics (BDA) in auditing is vital in the fourth industrial revolution era, yet imany auditors in Indonesia hesitate to embrace these tools. This study aims to identify factors influencing Indonesian auditors' intention to use BDA, applying the Unified Theory of Acceptance and Use of Technology (UTAUT) model and including perceived risk and trust variables. Using quantitative approach, questionnaires were distributed via Google Form to 134 auditor respondents in Indonesia, primarily in DKI Jakarta. Data were analyzed using Structural Equation Modeling (SEM) with SmartPLS. Result shows that performance expectancy, effort expectancy, social influence, and trust significantly influence auditors' intention to use BDA, while perceived risk does not significantly affect the intention to use BDA. This study underscores the importance of strengthening auditor trust in technology to enhance BDA adoption, with training and technical support identified as supportive factors to increase auditor comfort and confidence in using BDA in the future, also future research could explore the longitudinal impacts of BDA adoption or extend the study to diverse industries and regions.

Editorial Page and Table of Content

2024-12-25T11:56:46+00:00