HU MODEL OPTIMIZATION TO DETECT FRAUD IN FINANCIAL REPORTS THAT AFFECT GREEN VALUE WITH LITIGATION RISK IN ASEAN
DOI:
https://doi.org/10.18623/rvd.v22.n2.3204Keywords:
ASEAN, HU Model, Fraud, Green Value, LitigationAbstract
Fraud in financial reporting is a serious issue that undermines investor trust and reduces a firm's market value, particularly in the mining sector with its high risks and complex supervision. This study examines factors influencing financial reporting fraud and its impact on mining companies in Indonesia and Malaysia. The population consists of all mining firms listed on the Indonesia Stock Exchange (IDX) and Bursa Malaysia from 2018 to 2023. Data were collected through documentation and analyzed using panel data regression with STATA software. The findings show that financial stability (stimulus), industry complexity (opportunity), and auditor change (rationalization) significantly increase the likelihood of fraudulent reporting, while management integrity reduces such practices. However, the proportion of independent commissioners (capability) has no significant effect, and litigation risk does not moderate the relationship between fraud and firm market value, indicating weak enforcement and supervision in both countries. The study contributes to strengthening internal controls, oversight mechanisms, and policy formulation to prevent fraud in the mining industry.
References
Abbas, A. (2017a). EARNINGS FRAUD AND FINANCIAL STABILITY. Asia Pacific Fraud Journal, 2(1), 117. https://doi.org/10.21532/apfj.001.17.02.01.010
Abbas, A. (2017b). EARNINGS FRAUD AND FINANCIAL STABILITY. Asia Pacific Fraud Journal, 2(1), 117. https://doi.org/10.21532/apfj.001.17.02.01.010
Aulia Haqq, A. P. N., & Budiwitjaksono, G. S. (2020). Fraud Pentagon for Detecting Financial Statement Fraud. Journal of Economics, Business, & Accountancy Ventura, 22(3), 319–332. https://doi.org/10.14414/jebav.v22i3.1788
Budiyono, I., & Arum, M. S. D. (2020). Determinants in detecting fraud triangle of financial statements on companies registered in Jakarta Islamic Index (JII) period 2012-2018. Journal of Islamic Accounting and Finance Research, 2(1), 117. https://doi.org/10.21580/jiafr.2020.2.1.4818
Darwis, H., & Rini, N. (2024). Examining The Impact of Pressure and Opportunity on Financial Statement Fraud: Case Study Using the Beneish M-Score. www.idx.co.id
Darwis, H., & Saleh, R. (2024.). SCORE MODEL AND RISK LITIGATION: INVESTIGATING THE IMPACT OF FRAUD IN CORPORATE FINANCE. In IJME JOURNAL (Vol. 3)
Demetriades, P., & Owusu-Agyei, S. (2022). Fraudulent financial reporting: an application of fraud diamond to Toshiba’s accounting scandal. Journal of Financial Crime, 29(2), 729–763. https://doi.org/10.1108/JFC-05-2021-0108
Eisenhuth, R., & Marshall, D. (2022). Market Efficiency and Securities Fraud Litigation (pp. 83–107). https://doi.org/10.1108/s0193-589520220000030008
Hariri, H., Abdul, N., Ayoib, R., & Ahmad, C. (2024.). An Empirical Evidence of Audit Firm Merger and Audit Pricing in Malaysia.
He, P., Wang, K., & Xiao, X. (2016a). Does government control always reduce firm value? Theory and evidence from China. International Finance Review, 17, 151–187. https://doi.org/10.1108/S1569-376720160000017012
He, P., Wang, K., & Xiao, X. (2016b). Does government control always reduce firm value? Theory and evidence from China. International Finance Review, 17, 151–187. https://doi.org/10.1108/S1569-376720160000017012
Ibrahim, L., Supriatiningsih, & Darwis, H. (2024). Optimization of Green Value through the Application of the Determinant Pentagon Model in Prevention of Fraud in Financial Reports. Pakistan Journal of Life and Social Sciences, 22(2), 10188–10200. https://doi.org/10.57239/PJLSS-2024-22.2.00768
Intal, T., & Thuy, L. (2002). Accounting and Finance Financial Statement Fraud-Recognition of Revenue and the Auditor’s Responsibility for Detecting Financial Statement Fraud.
Jaya, S. (2020). Pengaruh Ukuran Perusahaan (Firm Size) dan Profitabilitas (ROA) Terhadap Nilai Perusahaan (Firm Value) Pada Perusahaan Sub Sektor Property dan Real Estate di Bursa Efek Indonesia (BEI). Jurnal Manajemen Motivasi, 16(1), 38. https://doi.org/10.29406/jmm.v16i1.2136
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X
Lastanti, H. S., Murwaningsari, E., & Umar, H. (2022). THE EFFECT OF HEXAGON FRAUD ON FRAUD FINANCIAL STATEMENTS WITH GOVERNANCE AND CULTURE AS MODERATING VARIABLES. Media Riset Akuntansi, Auditing & Informasi, 22(1), 143–156. https://doi.org/10.25105/mraai.v22i1.13533
Liu, G., & Sun, J. (2022). The effect of firm-specific litigation risk on independent director conservatism. Managerial Finance, 48(1), 96–112. https://doi.org/10.1108/MF-08-2020-0442
Luckman Ibrahim, H. D. S. (2022). MEKANISME GOOD CORPORATE GOVERNANCE DALAM MENEKAN TINDAKAN KECURANGAN PADA PERUSAHAAN GO GREEN DI INDONESIA. Jurnal AKuntansi, 2(11), 248–263.
Meisy, M., & Astuti, C. D. (2023). PERAN LITIGATION RISK DALAM MEMODERASI PENGARUH LIFE CYCLE DAN LEGAL EXPERTISE TERHADAP PRUDENCE AKUNTANSI. Jurnal Akuntansi Trisakti, 10(1), 15–30. https://doi.org/10.25105/jat.v10i1.16019
Miftahul Jannah, V., & Rasuli, M. (2021). Pendekatan Vousinas Fraud Hexagon Model dalam Mendeteksi Kecurangan Pelaporan Keuangan. Studi Akuntansi Dan Keuangan Indonesia, 4(1).
Novita Wulandari, D., Nuryatno, M., & Studi Akuntansi Universitas Trisakti Jakarta, P. F. (2018). THE EFFECT OF INTERNAL CONTROL, ANTI-FRAUD AWARENESS, INTEGRITY, INDEPENDENCE, AND PROFESIONALISM TO FRAUD PREVENTION. 4(2).
Purwanto, A., Tampil Purba, J., Bernarto, I., & Sijabat, R. (2021). Pengaruh Servant, Digital dan Green Leadership terhadap Kinerja Industri Manufaktur melalui Mediasi Komitmen Organisasi. Jurnal Riset Inspirasi Manajemen Dan Kewirausahaan, 5(1). https://doi.org/10.35130/jrimk
Rahman Siddiq, F., & Hadinata UIN Sunan Kalijaga Yogyakarta, S. (n.d.). FRAUD DIAMOND DALAM FINANCIAL STATEMENT FRAUD.
Ridwan Basalamah, M. (2019). JOURNAL OF AUDITING, FINANCE, AND FORENSIC ACCOUNTING (JAFFA) THE IMPACT OF OBEDIANCE PRESSURE ON RISKY CHOICE BEHAVIOR. 7(2). https://doi.org/10.21107/jaffa.v7i2.6422
S, S., & Darwis, H. (2023). Peran Corporate Governance Terhadap Tax Avoidance pada Perusahaan di Indonesia. WIDYAKALA JOURNAL : JOURNAL OF PEMBANGUNAN JAYA UNIVERSITY, 10(1). https://doi.org/10.36262/widyakala.v10i1.685
Sahla, W. A., & Ardianto, A. (2023). Ethical values and auditors fraud tendency perception: testing of fraud pentagon theory. Journal of Financial Crime, 30(4), 966–982. https://doi.org/10.1108/JFC-04-2022-0086
Shahzadi, K., Alim, W., & Khan, S. N. (2024). Do the fraud triangle components fuel complex financial fraud? A study of nonfinancial firms in Pakistan. Journal of Financial Crime. https://doi.org/10.1108/JFC-10-2023-0270.
Street, D. A., & Hermanson, D. R. (2019). How do restatements affect outside directors and boards? A review of the literature. Journal of Accounting Literature, 43, 19–46. https://doi.org/10.1016/j.acclit.2019.07.001
Supriatiningsih, Taqi, M., Uzliawati, L., & Muchlis, M. (2024). The Effect Of The Fraud Triangle Model On Fraud Financial Reporting With The Audit Committee As A Moderating Variable In Go Green Indonesia Companies. Quality - Access to Success, 25(202), 220–230. https://doi.org/10.47750/QAS/25.202.24
Surjaatmaja, L. (2018). Detecting Fraudulent Financial Statement Using Fraud Triangle: Capability as Moderating Variable. KnE Social Sciences, 3(10), 945. https://doi.org/10.18502/kss.v3i10.3184
Syahria, R. (2019). DETECTING FINANCIAL STATEMENT FRAUD USING FRAUD DIAMOND (A Study on Banking Companies Listed On the Indonesia Stock Exchange Period 2012-2016). Asia Pacific Fraud Journal, 4(2). https://doi.org/10.21532/apfjournal.v4i2.114
Tang, F., Ruan, L., & Yang, L. (2017). Does regulator designation of auditors improve independence?: The moderating effects of litigation risk. Managerial Auditing Journal, 32(1), 2–18. https://doi.org/10.1108/MAJ-03-2016-1334
Umar, H., Purba, R., Siahaan, M., Safaria, S., Mudiar, W., & Markonah, M. (2024). Corruption prevention in organizational clustering in Indonesia: through the role of the HU-model in detecting corruption. Journal of Money Laundering Control, 27(7), 60–75. https://doi.org/10.1108/JMLC-10-2023-0163
Utami, I., Wijono, S., Noviyanti, S., & Mohamed, N. (2019). Fraud diamond, Machiavellianism and fraud intention. International Journal of Ethics and Systems, 35(4), 531–544. https://doi.org/10.1108/IJOES-02-2019-0042
Villaescusa, N., & Amat, O. (2022). When collusion meets the fraud triangle: a case study approach. Journal of Financial Crime, 29(3), 805–815. https://doi.org/10.1108/JFC-05-2021-0111
Waheed, A., Mahmood, H., & Wen, J. (2024). Corporate governance, litigation risk and firm performance: a mediation moderating model. International Journal of Emerging Markets, 19(3), 665–678. https://doi.org/10.1108/IJOEM-02-2022-0320
Wibawa, S., Sasongko, A., & Umar, H. (2022). The Impact of Faud Star on Detecting Fraudulent Financial Statement. Budapest International Research and Critics Institute-Journal (BIRCI-Journal), 5(5), 6110–6121. https://doi.org/10.33258/birci.v5i1.4333
Yunisari, A., Evana, E., & Metalia, M. (2024). The Role of Lack of Integrity as a Moderator of the Fraud Hexagone Influence on Potential Financial Statement Fraud. Journal of Asian Multicultural Research for Economy and Management Study, 5(1), 13–26. https://doi.org/10.47616/jamrems.v5i1.491
Downloads
Published
How to Cite
Issue
Section
License
I (we) submit this article which is original and unpublished, of my (our) own authorship, to the evaluation of the Veredas do Direito Journal, and agree that the related copyrights will become exclusive property of the Journal, being prohibited any partial or total copy in any other part or other printed or online communication vehicle dissociated from the Veredas do Direito Journal, without the necessary and prior authorization that should be requested in writing to Editor in Chief. I (we) also declare that there is no conflict of interest between the articles theme, the author (s) and enterprises, institutions or individuals.
I (we) recognize that the Veredas do Direito Journal is licensed under a CREATIVE COMMONS LICENSE.
Licença Creative Commons Attribution 3.0
