The Effect of the Fraud Triangle and Sharia Compliance Disclosure on Financial Statement Fraud in Indonesian Islamic Banks
Financial statement fraud in Islamic banks is unethical because, in this way, banks mislead their shareholders and other users of financial statements. Applying Sharia rules in Islamic institutions is an effort to prevent fraud in financial statements. Three conditions generally arise when fraud occ...
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| Format: | Article |
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Institute of Accounting and Finance
2024-12-01
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| Series: | Облік і фінанси |
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| Online Access: | http://www.afj.org.ua/pdf/1110-vpliv-trikutnika-shahraystva-ta-rozkrittya-informacii-pro-dotrimannya-shariatu-na-shahraystvo-u-finansoviy-zvitnosti-v-islamskih-bankah-indonezii.pdf |
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| author | Dhea Marella Aulia Muhammad Farhan Agil Novriansa Christian Damar Sagara Sitepu |
| author_facet | Dhea Marella Aulia Muhammad Farhan Agil Novriansa Christian Damar Sagara Sitepu |
| author_sort | Dhea Marella Aulia |
| collection | DOAJ |
| description | Financial statement fraud in Islamic banks is unethical because, in this way, banks mislead their shareholders and other users of financial statements. Applying Sharia rules in Islamic institutions is an effort to prevent fraud in financial statements. Three conditions generally arise when fraud occurs: management under pressure, lack of control, and a group of people involved in rationalizing fraud. This study will analyze the relationship between the fraud triangle and Sharia compliance disclosure in minimizing and detecting financial statement fraud in Indonesian Islamic banks. This study aims to determine how these variables influence financial statement fraud, using the F-score as a measurement. This quantitative research utilizes secondary data from the official websites of Islamic banks. The population and sample for this study comprise Islamic banks in Indonesia from 2018 to 2023. The research uses a logistic regression method to analyze the data. The study results showed that financial stability (proxied by bank asset changes) and Islamic income ratio do not impact financial statement fraud. Instead, the presence of an independent board of commissioners who supervise objectively and effectively can influence company management in minimizing the risk of fraud in financial statement presentations. Additionally, changing auditors increases the likelihood of detecting potential fraud in financial statements. Sharia compliance disclosure also significantly increases the reliability of financial reporting data and indicates a high level of corporate responsibility for the Islamic bank to shareholders and society. The management of Islamic banks can use the results of this study to understand the determinants of financial statement fraud better. |
| format | Article |
| id | doaj-art-b83527cac1a745f3bd3bb722c218289d |
| institution | Kabale University |
| issn | 2307-9878 2518-1181 |
| language | deu |
| publishDate | 2024-12-01 |
| publisher | Institute of Accounting and Finance |
| record_format | Article |
| series | Облік і фінанси |
| spelling | doaj-art-b83527cac1a745f3bd3bb722c218289d2025-01-07T15:55:04ZdeuInstitute of Accounting and FinanceОблік і фінанси2307-98782518-11812024-12-014(106)10110710.33146/2307-9878-2024-4(106)-101-107The Effect of the Fraud Triangle and Sharia Compliance Disclosure on Financial Statement Fraud in Indonesian Islamic BanksDhea Marella Aulia0https://orcid.org/0009-0000-3379-9515Muhammad Farhan1https://orcid.org/0009-0003-1688-1404Agil Novriansa2https://orcid.org/0000-0002-5579-6451Christian Damar Sagara Sitepu3https://orcid.org/0009-0000-4544-683XSriwijaya University, Palembang, IndonesiaSriwijaya University, Palembang, IndonesiaSriwijaya University, Palembang, IndonesiaSriwijaya University, Palembang, IndonesiaFinancial statement fraud in Islamic banks is unethical because, in this way, banks mislead their shareholders and other users of financial statements. Applying Sharia rules in Islamic institutions is an effort to prevent fraud in financial statements. Three conditions generally arise when fraud occurs: management under pressure, lack of control, and a group of people involved in rationalizing fraud. This study will analyze the relationship between the fraud triangle and Sharia compliance disclosure in minimizing and detecting financial statement fraud in Indonesian Islamic banks. This study aims to determine how these variables influence financial statement fraud, using the F-score as a measurement. This quantitative research utilizes secondary data from the official websites of Islamic banks. The population and sample for this study comprise Islamic banks in Indonesia from 2018 to 2023. The research uses a logistic regression method to analyze the data. The study results showed that financial stability (proxied by bank asset changes) and Islamic income ratio do not impact financial statement fraud. Instead, the presence of an independent board of commissioners who supervise objectively and effectively can influence company management in minimizing the risk of fraud in financial statement presentations. Additionally, changing auditors increases the likelihood of detecting potential fraud in financial statements. Sharia compliance disclosure also significantly increases the reliability of financial reporting data and indicates a high level of corporate responsibility for the Islamic bank to shareholders and society. The management of Islamic banks can use the results of this study to understand the determinants of financial statement fraud better.http://www.afj.org.ua/pdf/1110-vpliv-trikutnika-shahraystva-ta-rozkrittya-informacii-pro-dotrimannya-shariatu-na-shahraystvo-u-finansoviy-zvitnosti-v-islamskih-bankah-indonezii.pdffraud trianglesharia compliance disclosurefinancial statement fraudf-scoreislamic banks |
| spellingShingle | Dhea Marella Aulia Muhammad Farhan Agil Novriansa Christian Damar Sagara Sitepu The Effect of the Fraud Triangle and Sharia Compliance Disclosure on Financial Statement Fraud in Indonesian Islamic Banks Облік і фінанси fraud triangle sharia compliance disclosure financial statement fraud f-score islamic banks |
| title | The Effect of the Fraud Triangle and Sharia Compliance Disclosure on Financial Statement Fraud in Indonesian Islamic Banks |
| title_full | The Effect of the Fraud Triangle and Sharia Compliance Disclosure on Financial Statement Fraud in Indonesian Islamic Banks |
| title_fullStr | The Effect of the Fraud Triangle and Sharia Compliance Disclosure on Financial Statement Fraud in Indonesian Islamic Banks |
| title_full_unstemmed | The Effect of the Fraud Triangle and Sharia Compliance Disclosure on Financial Statement Fraud in Indonesian Islamic Banks |
| title_short | The Effect of the Fraud Triangle and Sharia Compliance Disclosure on Financial Statement Fraud in Indonesian Islamic Banks |
| title_sort | effect of the fraud triangle and sharia compliance disclosure on financial statement fraud in indonesian islamic banks |
| topic | fraud triangle sharia compliance disclosure financial statement fraud f-score islamic banks |
| url | http://www.afj.org.ua/pdf/1110-vpliv-trikutnika-shahraystva-ta-rozkrittya-informacii-pro-dotrimannya-shariatu-na-shahraystvo-u-finansoviy-zvitnosti-v-islamskih-bankah-indonezii.pdf |
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