This study aims to analyze the direct effects of external pressure, effective monitoring, changes in auditors, changes in directors, and CEO picture on fraudulent financial reporting, as well as investigate the role of the audit committee as a moderating variable. The study draws on the pentagon fraud theory, which includes pressure, opportunities, rationalization, and capability, to explain the factors influencing fraudulent financial reporting. In this framework, external pressure is measured by external factors, opportunities by effective monitoring, rationalization by changes in auditors, and capability by changes in directors. CEO picture is used as a proxy for arrogance. The F-Score model is employed to assess the potential for fraudulent financial reporting. The sample consists of 80 state-owned companies listed on the Indonesia Stock Exchange (IDX), selected through purposive sampling based on specific criteria. The study uses secondary time-series data from 2020 to 2023, sourced from IDX.com and the official websites of state-owned companies. A quantitative research approach is applied, with panel data regression analysis and hypothesis testing conducted using WarpPLS 7.0 and the coefficient of determination test. The findings reveal that external pressure, changes in auditors, and CEO picture significantly influence fraudulent financial reporting. Furthermore, CEO image, moderated by effective corporate governance, is found to impact the ability to detect fraudulent financial reporting.
Swastyayana et al. (Mon,) studied this question.