Board characteristics, audit committee, and the possibility of financial statement fraud

Financial reports provide information on a company's accounting results, which can be used to assess its condition and performance. This research aims to examine the influence of board characteristics and the audit committee on the possibility of financial statement fraud with company size, leverage, and profitability as control variables. The study utilizes a purposive sampling technique to collect data, focusing on manufacturing companies listed on the Indonesia Stock Exchange (IDX). It specifically analyzes financial and annual reports published in 2022 and 2023. This research funds 62 companies as the sample. The findings reveal that board characteristics, such as the number of female board members, number of board commissioners, frequency of board meetings, and number of independent commissioners, do not significantly affect the likelihood of financial statement fraud. However, while board characteristics were not significant overall, the number of board commissioners and independent commissioners showed a negative relationship with the likelihood of fraud. This means that the greater the number of board commissioners and independent commissioners, the lower the likelihood of fraud. Furthermore, the number of audit committee meetings does not influence the likelihood of financial statement fraud.