Moderate of audit committee on components of the fraud hexagon theory and fraudulent financial statements

Abstract

This study aims to analyze the effect of each component of the fraud hexagon theory on fraudulent financial statements with the audit committee as a moderator. This research was conducted at banking sector companies listed on the IDX in 2019-2022, totaling 47 companies. The sampling method uses purposive sampling which results in 44 companies with 176 financial data used as samples. Data analysis was carried out on secondary data with SEM-PLS analysis techniques. The results of this study indicate that independent commissioners who hold concurrent positions, the ratio of total accruals to total assets (TATA) and ineffective monitoring have no effect on fraudulent financial statements. External pressure has a negative effect on fraudulent financial statements, while changes in directors and managerial ownership have a positive effect on fraudulent financial statements. The audit committee is able to moderate the effect of external pressure, change of directors, managerial ownership and ineffective monitoring on fraudulent financial statements. The audit committee is unable to moderate the effect of independent commissioners who hold concurrent positions, the ratio of total accruals to total assets (TATA) on fraudulent financial statements.