The Role of Pressure and Industry Nature in Financial Statement Fraud Occurrence in Indonesia

Ilya Avianti, Dini Rosdini, Aliza Maulida Fauzya

Abstract


This study examines the influence of fraud triangle elements, pressure and opportunity on the occurrence of financial fraud in Indonesia. The rising number of fraud cases involving major Indonesian companies highlights the urgency of this research. The study aims to identify key factors that drive fraud to support fraud prevention efforts and strengthen risk management practices. Data were collected from 236 accounting and finance professionals working in public and private companies across 36 organisations in Indonesia through a secure online survey. The data were analysed using multiple linear regression, with validity and reliability testing conducted to ensure robust results. The findings indicate that fraud is driven not only by financial pressures, such as debt obligations, but also by non-financial motivations, including greed. Furthermore, the risk of fraud is lower in organisations that implement clear task segregation and maintain adequate documentation systems. A key limitation of this study is the exclusion of the rationalisation element of the fraud triangle, as it is cognitive and perception-based and therefore more suitable for examination among individuals who have committed fraud. Overall, this study offers practical insights for organisations, professionals, and institutions in detecting, preventing, and mitigating fraud, while emphasising the importance of organisational conditions and non-financial motivations in reducing the risk of financial statement fraud.

Keywords


Financial Fraud; Fraud Triangle; Pressure; Opportunity; Non-Financial Motivation; Risk Management; Internal Control.

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References


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DOI: https://doi.org/10.17509/jpak.v14i1.91523

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