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Aktan, B., & Bulut, C. (2008). Financial performance impacts of Corporate Entrepreneurship in Emerging markets: A case of Turkey. European Journal of Economics, Finance and Administrative Sciences, 12(12), 69–79.
Alhaddad, L. M., Whittington, M., & Gerged, A. M. (2022). Abnormal real activities, meeting earnings targets and firms’ future operating performance: evidence from an emerging economy. Journal of Accounting in Emerging Economies, 12(2), 213–237. https://doi.org/10.1108/JAEE-07-2020-0161
Ali, J., Tahira, Y., Amir, M., Ullah, F., Tahir, M., Shah, W., Khan, I., & Tariq, S. (2022). Leverage, Ownership Structure and Firm Performance. Journal of Financial Risk Management, 11(01), 41–65. https://doi.org/10.4236/jfrm.2022.111002
Audi, M., Ali, A., & Al-Masri, R. (2022). The Impact of Leverage on the Firm Performance: A Case of Fertilizers Sector of Pakistan. Scientific Annals of Economics and Business, 69(2).
Ayaz, M., Mohamed Zabri, S., & Ahmad, K. (2021). An empirical investigation on the impact of capital structure on firm performance: evidence from Malaysia. Managerial Finance, 47(8), 1107–1127. https://doi.org/10.1108/MF-11-2019-0586
Ayu, M., Lindrianasari, Gamayuni, R. R., & Urbański, M. (2020). The impact of environmental and social costs disclosure on financial performance mediating by earning management. Polish Journal of Management Studies, 21(1), 74–86. https://doi.org/10.17512/pjms.2020.21.2.06
Beneish, M. D. (1999). Incentives and penalties related to earnings overstatements that violate GAAP. Accounting Review, 74(4), 425–457. https://doi.org/10.2308/accr.1999.74.4.425
Danso, A., Lartey, T. A., Gyimah, D., & Adu-Ameyaw, E. (2020). Leverage and performance: do size and crisis matter? Managerial Finance, 47(5), 635–655. https://doi.org/10.1108/MF-10-2019-0522
Das, N. C., Chowdhury, M. A. F., & Islam, M. N. (2022). The heterogeneous impact of leverage on firm performance: empirical evidence from Bangladesh. South Asian Journal of Business Studies, 11(2), 235–252. https://doi.org/10.1108/SAJBS-04-2020-0100
Dey, R. K., Hossain, S. Z., & Rahman, R. A. (2018). Effect of Corporate Financial Leverage on Financial Performance: A Study on Publicly Traded Manufacturing Companies in Bangladesh. Asian Social Science, 14(12), 124. https://doi.org/10.5539/ass.v14n12p124
Fernando, A. A. J., Mallawarachchi, R., & Kaluarachchi, D. G. P. (2021). The Relationship between Financial Leverage and the Performance of Sri Lankan Listed Manufacturing Companies. Journal of Accounting Finance and Auditing Studies (JAFAS), 7(4), 99–118. https://doi.org/10.32602/jafas.2021.035
Franceschetti, B. M., & Koschtial, C. (2013). Do bankrupt companies manipulate earnings more than the non-bankrupt ones? Journal of Finance & Accountancy, 12, 4–24. http://ezproxy.library.capella.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=86950241&site=ehost-live&scope=site
Ghardallou, W. (2023). The heterogeneous effect of leverage on firm performance: a quantile regression analysis. International Journal of Islamic and Middle Eastern Finance and Management, 16(1), 210–225. https://doi.org/10.1108/IMEFM-12-2021-0490
Ghosh, S. (2007). Leverage, managerial monitoring and firm valuation: A simultaneous equation approach. Research in Economics, 61(2), 84–98. https://doi.org/10.1016/j.rie.2007.03.001
Gleason, K. C., Mathur, L. K., & Mathur, I. (2000). The interrelationship between culture, capital structure, and performance: Evidence from European retailers. Journal of Business Research, 50(2), 185–191. https://doi.org/10.1016/S0148-2963(99)00031-4
Huang, W., Boateng, A., & Newman, A. (2016). Capital structure of Chinese listed SMEs: an agency theory perspective. Small Business Economics, 47(2), 535–550. https://doi.org/10.1007/s11187-016-9729-6
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X
Juita, M. V. (2021). Influence of Corporate Governance , Leverage and Financial Performance on Earning Management on Manufacturing. Journal of Management, 12(1), 907–916.
Kalantonis, P., Kallandranis, C., & Sotiropoulos, M. (2021). Leverage and firm performance: new evidence on the role of economic sentiment using accounting information. Journal of Capital Markets Studies, 5(1), 96–107. https://doi.org/10.1108/jcms-10-2020-0042
Kalash, I. (2023). The financial leverage–financial performance relationship in the emerging market of Turkey: the role of financial distress risk and currency crisis. EuroMed Journal of Business, 18(1), 1–20. https://doi.org/10.1108/EMJB-04-2021-0056
Kate Jelinek. (2007). The Effect of Leverage Increase on Earnings Management. In Journal of Business & Economic Studies (Vol. 13, pp. 24–46).
Khan, N., Ullah, H., & Afeef, M. (2021). The Effect of Leverage and Debt Maturity on the Corporate Financial Performance: Evidence from Non Financial Firms Listed at Pakistan Stock Exchange. Sustainable Business and Society in Emerging Economies, 3(1), 35–47. https://doi.org/10.26710/sbsee.v3i1.1829
Khuong, N.V., Liem, N.T., Minh, M. T. H. (2020). Earnings management and cash holdings: Evidence from energy firms in Vietnam. Journal of International Studies, 13(1), 247–261.
Kim, J. B., Li, Y., & Zhang, L. (2011). Corporate tax avoidance and stock price crash risk: Firm-level analysis. Journal of Financial Economics, 100(3), 639–662. https://doi.org/10.1016/j.jfineco.2010.07.007
Mahama, M. (2015). Detecting Corporate Fraud and Financial Distress Using the Altman and Beneish Models. International Journal of Economics, Commerce and Management, III(1), 1–18.
Majerčák, P., Klieštik, T., Masárová, G., Buc, D., & Majerčáková, E. (2013). System approach of logistic costs optimization solution in supply chain . Nase More, 60(5–6), 95–98. http://www.scopus.com/inward/record.url?eid=2-s2.0-84891652281&partnerID=40&md5=965e6f3544769c3b10fb959e1a823dd3
Makka, K., Kampova, K., Boros, M. (2019). Workplace training in the fuels distribution company. 13th International Technology, Education and Development Conference (INTED2019), 3990–3995.
Mavengere, K. (2015). Predicting corporate bankruptcy and earnings manipulation using the Altman Z-score and Beneish M score. The case ofZ manufacturing firm in Zimbabwe. International Journal of Management Sciences and Business Research, 4(10), 8–14.
McKee, T. E. (2005). Earnings management: An Executive Perspective. Cengage Learning.
Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13(2), 187–221. https://doi.org/10.1016/0304-405X(84)90023-0
Nwofia, J. E. (2018). Contracting Out Services in the Nigerian Local Government: Implications for Internal Revenue Generation. International Journal of Social Science Studies, 6(7), 71. https://doi.org/10.11114/ijsss.v6i7.3411
Popoola, A. P., & Suleiman, U. (2020). Leverage and Financial Performance of Listed Deposit Money Banks in Nigeria. Gusau International Journal of Management and Social Sciences, 3(1), 68–81.
Rosner, R. L. (2003). Earnings Manipulation in Failing Firms. Contemporary Accounting Research, 20(2), 361–408. https://doi.org/10.1506/8EVN-9KRB-3AE4-EE81
Roy, C., & Debnath, P. (2015). Earnings Management Practices in Financial Reporting of Public Enterprises in India: An Empirical Test with M-Score. SSRN Electronic Journal, 1. https://doi.org/10.2139/ssrn.2551713
Schipper, K. (1989). Commentary on Earnings Management. Accounting Horizons, 3, 91–102.
Shirabe, Y., & Nakano, M. (2022). Does Integrated Reporting Affect Real Activities Manipulation? Sustainability (Switzerland), 14(17), 1–27. https://doi.org/10.3390/su141711110
Siekelova, A., Androniceanu, A., Durana, P., & Michalikova, K. F. (2020). Earnings management (Em), initiatives and company size: An empirical study. Acta Polytechnica Hungarica, 17(9), 41–56. https://doi.org/10.12700/aph.17.9.2020.9.3
Svabova, L., Kramarova, K., Chutka, J., Strakova, L. (2020). Detecting earnings manipulation and fraudulent financial reporting in Slovakia. Oeconomia Copernicana, 11(3), 485–508.
Tabassum, N., Kaleem, A., & Nazir, M. S. (2015). Real Earnings Management and Future Performance. Global Business Review, 16(1), 21–34. https://doi.org/10.1177/0972150914553505
Talab, H. R., Mohammed, Y. N., & Flayyih, H. H. (2018). Book of proceedings International Institute for Private-Commercial-and Competition Law (Austria) in Partnership with Third International Conference on: "Social And Natural Sciences. International Institute for Private- Commercial- and Competition Law (Austria)“Social and Natural Sciences – Global Challenge 2018, August, 278–286. https://www.researchgate.net/publication/335230942
Tuffnell, C., Kral, P., Durana, P., Krulicky, T. (2019). ). Industry 4.0-based Manufacturing Systems: Smart Production, Sustainable Supply Chain Networks, and Real-Time Process Monitoring. . . Journal of Self-Governance and Management Economics, 7(12), 7–12.
Umobong, A., & Ibanichuka, E. (2016). Accounting Manipulations and Firms Financial Performance: Evidence from Nigeria. European Journal of Accounting, Auditing and Finance Research, 4(10), 30–47.
Valaskova, K., & Fedorko, R. (2021). Beneish M-score: A measure of fraudulent financial transactions in global environment? SHS Web of Conferences, 92, 1–10. https://doi.org/10.1051/shsconf/20219202064
Aktan, B., & Bulut, C. (2008). Financial performance impacts of Corporate Entrepreneurship in Emerging markets: A case of Turkey. European Journal of Economics, Finance and Administrative Sciences, 12(12), 69–79.
Alhaddad, L. M., Whittington, M., & Gerged, A. M. (2022). Abnormal real activities, meeting earnings targets and firms’ future operating performance: evidence from an emerging economy. Journal of Accounting in Emerging Economies, 12(2), 213–237. https://doi.org/10.1108/JAEE-07-2020-0161
Ali, J., Tahira, Y., Amir, M., Ullah, F., Tahir, M., Shah, W., Khan, I., & Tariq, S. (2022). Leverage, Ownership Structure and Firm Performance. Journal of Financial Risk Management, 11(01), 41–65. https://doi.org/10.4236/jfrm.2022.111002
Audi, M., Ali, A., & Al-Masri, R. (2022). The Impact of Leverage on the Firm Performance: A Case of Fertilizers Sector of Pakistan. Scientific Annals of Economics and Business, 69(2).
Ayaz, M., Mohamed Zabri, S., & Ahmad, K. (2021). An empirical investigation on the impact of capital structure on firm performance: evidence from Malaysia. Managerial Finance, 47(8), 1107–1127. https://doi.org/10.1108/MF-11-2019-0586
Ayu, M., Lindrianasari, Gamayuni, R. R., & Urbański, M. (2020). The impact of environmental and social costs disclosure on financial performance mediating by earning management. Polish Journal of Management Studies, 21(1), 74–86. https://doi.org/10.17512/pjms.2020.21.2.06
Beneish, M. D. (1999). Incentives and penalties related to earnings overstatements that violate GAAP. Accounting Review, 74(4), 425–457. https://doi.org/10.2308/accr.1999.74.4.425
Danso, A., Lartey, T. A., Gyimah, D., & Adu-Ameyaw, E. (2020). Leverage and performance: do size and crisis matter? Managerial Finance, 47(5), 635–655. https://doi.org/10.1108/MF-10-2019-0522
Das, N. C., Chowdhury, M. A. F., & Islam, M. N. (2022). The heterogeneous impact of leverage on firm performance: empirical evidence from Bangladesh. South Asian Journal of Business Studies, 11(2), 235–252. https://doi.org/10.1108/SAJBS-04-2020-0100
Dey, R. K., Hossain, S. Z., & Rahman, R. A. (2018). Effect of Corporate Financial Leverage on Financial Performance: A Study on Publicly Traded Manufacturing Companies in Bangladesh. Asian Social Science, 14(12), 124. https://doi.org/10.5539/ass.v14n12p124
Fernando, A. A. J., Mallawarachchi, R., & Kaluarachchi, D. G. P. (2021). The Relationship between Financial Leverage and the Performance of Sri Lankan Listed Manufacturing Companies. Journal of Accounting Finance and Auditing Studies (JAFAS), 7(4), 99–118. https://doi.org/10.32602/jafas.2021.035
Franceschetti, B. M., & Koschtial, C. (2013). Do bankrupt companies manipulate earnings more than the non-bankrupt ones? Journal of Finance & Accountancy, 12, 4–24. http://ezproxy.library.capella.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=86950241&site=ehost-live&scope=site
Ghardallou, W. (2023). The heterogeneous effect of leverage on firm performance: a quantile regression analysis. International Journal of Islamic and Middle Eastern Finance and Management, 16(1), 210–225. https://doi.org/10.1108/IMEFM-12-2021-0490
Ghosh, S. (2007). Leverage, managerial monitoring and firm valuation: A simultaneous equation approach. Research in Economics, 61(2), 84–98. https://doi.org/10.1016/j.rie.2007.03.001
Gleason, K. C., Mathur, L. K., & Mathur, I. (2000). The interrelationship between culture, capital structure, and performance: Evidence from European retailers. Journal of Business Research, 50(2), 185–191. https://doi.org/10.1016/S0148-2963(99)00031-4
Huang, W., Boateng, A., & Newman, A. (2016). Capital structure of Chinese listed SMEs: an agency theory perspective. Small Business Economics, 47(2), 535–550. https://doi.org/10.1007/s11187-016-9729-6
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X
Juita, M. V. (2021). Influence of Corporate Governance , Leverage and Financial Performance on Earning Management on Manufacturing. Journal of Management, 12(1), 907–916.
Kalantonis, P., Kallandranis, C., & Sotiropoulos, M. (2021). Leverage and firm performance: new evidence on the role of economic sentiment using accounting information. Journal of Capital Markets Studies, 5(1), 96–107. https://doi.org/10.1108/jcms-10-2020-0042
Kalash, I. (2023). The financial leverage–financial performance relationship in the emerging market of Turkey: the role of financial distress risk and currency crisis. EuroMed Journal of Business, 18(1), 1–20. https://doi.org/10.1108/EMJB-04-2021-0056
Kate Jelinek. (2007). The Effect of Leverage Increase on Earnings Management. In Journal of Business & Economic Studies (Vol. 13, pp. 24–46).
Khan, N., Ullah, H., & Afeef, M. (2021). The Effect of Leverage and Debt Maturity on the Corporate Financial Performance: Evidence from Non Financial Firms Listed at Pakistan Stock Exchange. Sustainable Business and Society in Emerging Economies, 3(1), 35–47. https://doi.org/10.26710/sbsee.v3i1.1829
Khuong, N.V., Liem, N.T., Minh, M. T. H. (2020). Earnings management and cash holdings: Evidence from energy firms in Vietnam. Journal of International Studies, 13(1), 247–261.
Kim, J. B., Li, Y., & Zhang, L. (2011). Corporate tax avoidance and stock price crash risk: Firm-level analysis. Journal of Financial Economics, 100(3), 639–662. https://doi.org/10.1016/j.jfineco.2010.07.007
Mahama, M. (2015). Detecting Corporate Fraud and Financial Distress Using the Altman and Beneish Models. International Journal of Economics, Commerce and Management, III(1), 1–18.
Majerčák, P., Klieštik, T., Masárová, G., Buc, D., & Majerčáková, E. (2013). System approach of logistic costs optimization solution in supply chain . Nase More, 60(5–6), 95–98. http://www.scopus.com/inward/record.url?eid=2-s2.0-84891652281&partnerID=40&md5=965e6f3544769c3b10fb959e1a823dd3
Makka, K., Kampova, K., Boros, M. (2019). Workplace training in the fuels distribution company. 13th International Technology, Education and Development Conference (INTED2019), 3990–3995.
Mavengere, K. (2015). Predicting corporate bankruptcy and earnings manipulation using the Altman Z-score and Beneish M score. The case ofZ manufacturing firm in Zimbabwe. International Journal of Management Sciences and Business Research, 4(10), 8–14.
McKee, T. E. (2005). Earnings management: An Executive Perspective. Cengage Learning.
Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13(2), 187–221. https://doi.org/10.1016/0304-405X(84)90023-0
Nwofia, J. E. (2018). Contracting Out Services in the Nigerian Local Government: Implications for Internal Revenue Generation. International Journal of Social Science Studies, 6(7), 71. https://doi.org/10.11114/ijsss.v6i7.3411
Popoola, A. P., & Suleiman, U. (2020). Leverage and Financial Performance of Listed Deposit Money Banks in Nigeria. Gusau International Journal of Management and Social Sciences, 3(1), 68–81.
Rosner, R. L. (2003). Earnings Manipulation in Failing Firms. Contemporary Accounting Research, 20(2), 361–408. https://doi.org/10.1506/8EVN-9KRB-3AE4-EE81
Roy, C., & Debnath, P. (2015). Earnings Management Practices in Financial Reporting of Public Enterprises in India: An Empirical Test with M-Score. SSRN Electronic Journal, 1. https://doi.org/10.2139/ssrn.2551713
Schipper, K. (1989). Commentary on Earnings Management. Accounting Horizons, 3, 91–102.
Shirabe, Y., & Nakano, M. (2022). Does Integrated Reporting Affect Real Activities Manipulation? Sustainability (Switzerland), 14(17), 1–27. https://doi.org/10.3390/su141711110
Siekelova, A., Androniceanu, A., Durana, P., & Michalikova, K. F. (2020). Earnings management (Em), initiatives and company size: An empirical study. Acta Polytechnica Hungarica, 17(9), 41–56. https://doi.org/10.12700/aph.17.9.2020.9.3
Svabova, L., Kramarova, K., Chutka, J., Strakova, L. (2020). Detecting earnings manipulation and fraudulent financial reporting in Slovakia. Oeconomia Copernicana, 11(3), 485–508.
Tabassum, N., Kaleem, A., & Nazir, M. S. (2015). Real Earnings Management and Future Performance. Global Business Review, 16(1), 21–34. https://doi.org/10.1177/0972150914553505
Talab, H. R., Mohammed, Y. N., & Flayyih, H. H. (2018). Book of proceedings International Institute for Private-Commercial-and Competition Law (Austria) in Partnership with Third International Conference on: "Social And Natural Sciences. International Institute for Private- Commercial- and Competition Law (Austria)“Social and Natural Sciences – Global Challenge 2018, August, 278–286. https://www.researchgate.net/publication/335230942
Tuffnell, C., Kral, P., Durana, P., Krulicky, T. (2019). ). Industry 4.0-based Manufacturing Systems: Smart Production, Sustainable Supply Chain Networks, and Real-Time Process Monitoring. . . Journal of Self-Governance and Management Economics, 7(12), 7–12.
Umobong, A., & Ibanichuka, E. (2016). Accounting Manipulations and Firms Financial Performance: Evidence from Nigeria. European Journal of Accounting, Auditing and Finance Research, 4(10), 30–47.
Valaskova, K., & Fedorko, R. (2021). Beneish M-score: A measure of fraudulent financial transactions in global environment? SHS Web of Conferences, 92, 1–10. https://doi.org/10.1051/shsconf/20219202064
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Affiliations
Sasongko Tri Utomo
Doctoral of Department Management, Faculty of Economics and Business, University of Diponegoro, Semarang, Indonesia
Wisnu Mawardi
Department of Management, Faculty of Economics and Business, University of Diponegoro Semarang
How to Cite
1.
Utomo ST, Mawardi W. The Funding Burden in Detecting Financial Fraud. MAJ [Internet]. 30Oct.2023 [cited 18Jul.2024];12(3):332-4. Available from: https://journal.unnes.ac.id/sju/maj/article/view/74405
The Funding Burden in Detecting Financial Fraud
Vol 12 No 3 (2023): Management Analysis Journal
Submitted: Sep 12, 2023
Published: Oct 30, 2023
Abstract
The purpose of this research is to analyze the relationship between Leverage, financial performance and earnings manipulation. The Leverage in this study uses a debt to total asset (DART) proxy, while for financial performance it uses a return on asset (ROA) proxy. Manipulation decisions with the beneficial M score model where the results will be seen by companies in the manipulator or non-manipulator category. This study used a sample of manufacturing companies listed on the Indonesia Stock Exchange for the 2016 – 2020 period. The sample was taken using a purposive sampling technique and the number of samples used was 29 companies so the data analyzed was 145 data. The analytical method used is path analysis with SPSS software. These findings indicate that Leverage has a significant negative effect on financial performance. Financial performance has a positive effect on earnings manipulation and financial performance mediates a significant positive relationship between leverage and earnings manipulation. The results of these findings can be used as that for regulators, management, policy makers, government agencies (Financial Services Authority and the Indonesian Stock Exchange) in making procedures or developing a policy that is able to control or closely supervise companies in transparency of the company's financial condition so as to minimize companies committing fraud. financial Manipulation. In addition, this research is still rarely researched because many previous studies have focused on reporting quality, earnings management, financial fraud with proxies other than M Score so that to the author's knowledge no one has researched with a focus on earnings manipulation