Erosion of Company Value: Impact of Financial Statement Fraud in Diamond Theory

• Author(s): Supriatiningsih ; Hidayat Darwis ; Nova Rini
• Paper ID: 1706047
• Page: 214-222
• Published Date: 16-07-2024
• Published In: Iconic Research And Engineering Journals
• Publisher: IRE Journals
• e-ISSN: 2456-8880
• Volume/Issue: Volume 8 Issue 1 July-2024

Abstract

Fraud in financial statements can significantly affect the value of a company. The risk that the company must bear if it commits financial statement fraud is that investors and company stakeholders no longer trust the company, so they will withdraw their shares from the company. The purpose of this research is to examine how Diamond theory factors influence financial statement fraud and how they influence company value. The population comes from companies indexed by Sri Kehati shares and listed on the Indonesia Stock Exchange, there are 14 companies, between 2017 and 2021 providing a secondary data sample of 70. Data processing uses the Eviews12 program. Research on the Sri Kehati indexing company revealed that there was no significant relationship between financial target (ROA), change of director and change of audit on financial report fraud. Rationalization has an effect on financial report fraud, while financial report fraud has no impact on company value

Keywords

Change of director, Diamond theory, firm value, financial target, Fraudulent financial reporting

Citations

IRE Journals:
Supriatiningsih , Hidayat Darwis , Nova Rini "Erosion of Company Value: Impact of Financial Statement Fraud in Diamond Theory" Iconic Research And Engineering Journals Volume 8 Issue 1 2024 Page 214-222

IEEE:
Supriatiningsih , Hidayat Darwis , Nova Rini "Erosion of Company Value: Impact of Financial Statement Fraud in Diamond Theory" Iconic Research And Engineering Journals, 8(1)