Testing the Fraud Triangle Theory on Financial Statements of Energy Issuers on the Indonesia Stock Exchange 2020–2024

Multitech Publisher Selasa, Juni 30, 2026
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FORMOSA NEWS - Jakarta - Maintaining the integrity of financial reporting in public companies remains a critical cornerstone for capital market stability and investor confidence. To analyze the core factors driving these reporting dynamics, a recent scientific study conducted by Dede Nuraeni and Ridwan Herdyansyah from Universitas STIE Perguruan Tinggi Indonesia Mandiri has evaluated corporate accounting practices. Focusing on energy sector companies listed on the Indonesia Stock Exchange (IDX) during the 2020 to 2024 period, this empirical research published in June 2026 demonstrates how financial stability, internal oversight structures, and auditor adjustments interact with corporate financial statements.

The evaluation of material misstatements or intentional omissions of vital information in financial reporting continues to be an essential area of study within global and domestic corporate governance. According to data released by the Association of Certified Fraud Examiners (ACFE) in the Occupational Fraud 2024: A Report to the Nations, financial statement manipulation represents one of the most financially impactful categories of corporate non-compliance worldwide. In developing markets like Indonesia, corporate financial reports serve as a vital lifeline for investor trust, making the accurate representation of financial health crucial for the overall business ecosystem. Due to volatile market dynamics and inherent operational complexities, energy sector issuers on the IDX provide a highly relevant context for analyzing financial reporting behaviors.

Evaluating Governance Models in the Modern Corporate Era

To trace how reporting variations are constructed, Dede Nuraeni and Ridwan Herdyansyah tested the validity of the Fraud Triangle Theory, originally introduced by criminologist Donald Cressey in 1953. Through the lens of agency theory, an inherent information asymmetry can exist between management as the agent running the company and shareholders as the owners of capital. When companies face intense operational pressures or stringent financial targets, management may navigate accounting flexibilities to align with specific market expectations.

In structuring their research methodology, the two academics from Universitas STIE Perguruan Tinggi Indonesia Mandiri applied a quantitative causal approach based on reliable secondary data. They compiled annual reports and published audited financial statements from energy sector emiten on the IDX, selected using a purposive sampling technique based on explicit eligibility criteria.

To maintain strict objectivity, potential financial statement manipulation was measured using a rigorous forensic accounting mathematical formula, namely the Beneish M-Score method. Furthermore, the pressure variable was proxied by corporate financial stability, reflected through changes in total assets. The opportunity variable was analyzed through the proportion of independent board members within the corporate governance structure. Meanwhile, the rationalization variable was identified through the corporation's decision-making patterns regarding external auditor switching. The entire sequence of statistical data processing was executed using IBM SPSS Statistics software through a series of classic assumption tests, including the Kolmogorov-Smirnov normality test, multilinearity testing via Variance Inflation Factor (VIF) values, and heteroskedasticity testing through a scatterplot distribution.

Three Core Findings from Empirical Data Analysis

Based on the multiple linear regression analysis performed on the research model, Dede Nuraeni and Ridwan Herdyansyah formulated three main empirical conclusions regarding individual and collective variables:

  1. Financial Pressure Measures Have a Significant Positive Correlation: When a company's financial stability is challenged by asset contraction, management under pressure shows a higher statistical likelihood of adjusting accounting figures to maintain a stable market perception.
  2. Oversight Variables Show a Significant Positive Effect: Structural gaps or low proportions of independent commissioners in performing their monitoring function statistically increase the probability of undetected reporting adjustments, confirming that internal control mechanisms are vital.
  3. Auditor Switching Measures Correlate with Reporting Adjustments: The rationalization process, proxied by corporate decisions to change external auditors, shows a significant positive impact, often indicating a statistical relationship with aggressive accounting practices.

Collectively, statistical testing showed that the model's overall significance value sits far below the 0.05 threshold ($p < 0.001$) with a strong F-count value of 1971.828. These combined findings provide solid empirical confirmation that the three elements of the fraud triangle—pressure, opportunity, and rationalization—intertwine significantly within the reporting ecosystem of Indonesia's energy industry.

Policy Implications and Structural Preventive Strategies

The research findings formulated by Dede Nuraeni and Ridwan Herdyansyah carry important strategic implications for the regulatory framework of the Indonesian capital market. For regulatory bodies such as the Financial Services Authority (OJK) and the management of the Indonesia Stock Exchange, these findings present a data-driven formula to enhance early warning systems, particularly for emiten showing high asset instability or frequent shifts in public accounting firms without clear operational urgency.

For board commissioners, audit committees, and internal auditors, this study serves as an empirical reminder regarding the importance of reinforcing internal control walls to mitigate opportunity factors. Sound corporate governance must transcend basic paper compliance and be substantively embedded into daily operations. On the other hand, for public investors, the Beneish M-Score indicators and structural proxies utilized in this research can be actively adopted as objective risk analysis tools before allocating capital, enabling more secure and analytical investment decisions.

Academic Profiles of the Researchers

  • Dede Nuraeni: Lecturer and Researcher at Universitas STIE Perguruan Tinggi Indonesia Mandiri. Holds deep expertise in Financial Accounting, Forensic Accounting, and Public Sector Auditing. (Corresponding Author: dedenuraeni651@gmail.com).
  • Ridwan Herdyansyah: Researcher and Academic at Universitas STIE Perguruan Tinggi Indonesia Mandiri. Focuses on studies regarding Corporate Governance, Agency Theory, and Capital Market Risk Analysis.

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