Determinants of Financial Statement Fraud: The Roles of Pressure, Opportunity, and Rationalization with Audit Committee as a Moderating Variable in State-Owned Enterprises

Mochamad Andrianto Saputra; Murtanto

doi:10.63922/ijebir.v5i04.5396

Mochamad Andrianto Saputra Master of Accounting Program, Faculty of Economics and Business, Trisakti University, Jakarta, Indonesia
Murtanto Faculty of Economics and Business, Trisakti University, Jakarta, Indonesia

DOI: https://doi.org/10.63922/ijebir.v5i04.5396

Keywords: Financial Statement Fraud, Fraud Triangle, Pressure, Opportunity, Rationalization, Audit Committee, State-Owned Enterprises.

Abstract

This study examines the determinants of financial statement fraud by analyzing the effects of pressure, opportunity, and rationalization, as well as the moderating role of the audit committee in Indonesian State-Owned Enterprises (SOEs). The research is grounded in Agency Theory and the Fraud Triangle Theory, which explain that fraudulent financial reporting arises from managerial pressure, opportunities created by weak internal controls, and rationalization of unethical behavior. This study employs a quantitative approach using secondary data obtained from the annual reports of State-Owned Enterprises listed on the Indonesia Stock Exchange during the 2021–2025 period. The sample was selected using a purposive sampling technique, and the data were analyzed using panel data regression with a Moderated Regression Analysis (MRA) approach. Pressure is proxied by Return on Assets (ROA), opportunity by the proportion of independent commissioners, and rationalization by changes in directors, while financial statement fraud is measured using the F-Score. The findings indicate that pressure, opportunity, and rationalization significantly influence financial statement fraud. Furthermore, the audit committee weakens the influence of pressure, opportunity, and rationalization on financial statement fraud by strengthening financial oversight, improving internal control effectiveness, and enhancing the quality of corporate governance. These findings contribute to the literature on fraud detection and provide practical implications for regulators, investors, and State-Owned Enterprises in strengthening governance mechanisms to mitigate financial reporting fraud.

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