Corporate Governance Mechanisms in Preventing Accounting Fraud: A Study of Fraud Pentagon Model

Pamungkas, Imang Dapit and Ghozali, Imam and Achmad, Tarmizi and Khaddafi, Muammar and Hidayah, Retnoningrum (2018) Corporate Governance Mechanisms in Preventing Accounting Fraud: A Study of Fraud Pentagon Model. Journal of Applied Economic Sciences Quarterly, 8 (2). pp. 549-560. ISSN 2393 -5162

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Abstract

This research is aimed to identify whether financial targets, ineffective monitoring, change in auditor, change in direction and arrogance on accounting fraud and analyse the moderating effect of corporate governance mechanism on fraud pentagon model. This research compile data of 12 companies of fraud and non-fraud 32 companies listed on the Indonesian Stock Exchange during 2012-2016. The researcher uses logistic regression, the results of this study shows that risk factors in perspective fraud pentagon that significantly affect the accounting fraud are only a change in direction. As a moderating variable, corporate governance mechanisms ownership is only institutions which able to weaken the relationship of change in direction in the accounting fraud.

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