Fraudulent Financial Reporting Detection in Banking Sector: Evidence from Indonesia

The aim of this research is to analyse factors that can detect fraudulent financial reporting from the perspective of pentagon theory. In this research, financial target, financial stability, external pressure, ineffective monitoring, auditor quality, change in auditors, change in directors, and frequent number of CEO's picture are the observed variables to detect fraudulent financial reporting. The population of target is banking industries listed on the Indonesia Stock Exchange during 2016-2018. 126 data were obtained by using a judgment sampling technique and was analysed using a multiple linear regression analysis. The result indicates that in partial, financial target, external pressure, ineffective monitoring, auditor quality and change in auditors have an influence to detect fraudulent financial reporting, whereas in partial, financial stability, change in auditors and frequent number of CEO's picture have not proven can detect fraudulent financial reporting.