Evaluation of the Effectiveness of the Beneish M-Score Model as a Financial Statement Fraud Detection Tool

Authors

  • Audita Setiawan Universitas Sangga Buana
  • Allen Liana Faculty of Economic, Sangga Buana University,
  • Eva Rachmawati Faculty of Economic, Sangga Buana University
  • Yuli Surya Fauzia Pertami Faculty of Economic, Sangga Buana University

DOI:

https://doi.org/10.54099/aijbs.v4i2.949

Abstract

The purpose of financial reports is to give people meaningful information about the company's actual state, which helps them make decisions. It's important to be aware that when businesses offer financial reports, they can do so with accuracy and without engaging in dishonest business activities that could mislead consumers into making poor financial decisions. In order to distinguish between financial reports that are suspected of being altered and those that are not, a detection tool is required. The Beneish M-Score Model is a financial statement fraud detection technique used in this study. This study aims to investigate and evaluate the possibility of financial report fraud. The information utilized is secondary data taken from the financial reports of manufacturing companies in the food and beverage subsector that are listed on the Indonesia Stock Exchange (BEI). Utilizing Microsoft Excel and SPSS 26 software, a quantitative approach involving discriminant analysis is employed. Based on independent factors, an item can be divided into two or more categories using the discriminant analysis approach. The results of this research show that the variables that are able to distinguish between samples of financial reports that are suspected to have been manipulated and those that are suspected not to be manipulated are the Days Sales in Receivables Index (DSRI), Gross Margin Index (GMI), Asset Quality Index (AQI) and Sales Growth Index (SGI) variables) is proven to be able to distinguish financial reports that are suspected to have been manipulated. Meanwhile, the Depreciation Index (DEPI), Sales, General and Administrative Expenses Index (SGAI), Leverage Index (LVGI) and Total Accruals to Total Assets (TATA) variables were proven unable to distinguish financial reports that were suspected to have been manipulated.

Keywords

Beneish M-Score Model, Financial Statement Fraud.

References

ACFE. (2016). Report to the Nations on Occupational Fraud and Abuse: 2016 Global Fraud Study.

ACFE. (2018). Fraud Resources. ( 2018 Association of Certified Fraud Examiners, Inc. All rights reserved).

Adhania, S., Holiawati, H., & Nofryanti, N. (2024). The Effect of Hexagon Fraud Theory in Detecting Financial Statement Fraud. International Journal of Digital Marketing Science, 1(1), Article 1. https://doi.org/10.54099/ijdms.v1i1.854

Agustina, S., Ruhiyat, E., & Sugiyanto, S. (2024). Green Intellectual Capital, Asset Growth on Stock Return: Role Financial Performance as Intervening. Asean International Journal of Business, 3(1), Article 1. https://doi.org/10.54099/aijb.v3i1.839

Alfina, A. M., & Wiwik, W. U. (2024). Factors Affecting Profit Quality in Non-Bank Financial Sector Companies. International Journal of Indonesian Business Review, 3(2), Article 2. https://doi.org/10.54099/ijibr.v3i2.946

Andardini, S. E. R., Erlina, E., & Adnans, A. A. (2024). The Audit Committee as A Moderating Variable: Factors Influencing Audit Quality in Financial Sector on the IDX : THE INFLUENCE OF AUDIT TENURE, AUDIT ROTATION, AND AUDIT FEE ON AUDIT QUALITY WITH THE AUDIT COMMITTEE AS A MODERATING VARIABLE (STUDY OF FINANCIAL SECTOR COMPANIES LISTED ON THE IDX). International Journal of Islamic Business and Management Review, 4(1), Article 1. https://doi.org/10.54099/ijibmr.v4i1.611

Aulia Rachmi, F. at al. (2020). Analisis Financial Statement Fraud Menggunakan Beneish M-Score Model Pada Perusahaan Pertambangan Yang Terdaftar Di Bursa Efek Indonesia. Ekonomi Bisnis Dan Akuntansi Volume, 7.

Beneish, M. D. (1999). The Detection of Earnings Manipulation. Financial Analysts Journal, 5, 24–36.

Crowe, H. (2011). Putting The Freud in Fraud: Why the Fraud Triangle is No Longer Enough.

Fadison, B., Bosco, T. J., Moses, A., & David, K. J. (2024). Financial Accountability And Service Delivery In Kabale District Uganda. International Journal of Management and Business Applied, 3(1), Article 1. https://doi.org/10.54099/ijmba.v3i1.729

Ghozali, Imam, & L. H. (2014). Partial Least Squares: Konsep, Teknik dan Aplikasi Menggunakan SmartPLS 3.0 (edisi ke-2). Universitas Diponegoro.

Hema, E. C. (2013). Pendeteksian Kecurangan Laporan Keuangan (Financial Statement Fraud) dengan menggunakan Beneish Ratio Index pada Perusahaan Manufaktur yang Listing di Bursa Efek Indonesia tahun 2010-2011. Universitas Negeri Yogyakarta.

Hendrawati, E., Pramudianti, M., & Abidin, K. (2022). Fraud Prevention of Village Fund Management. International Journal of Islamic Business and Management Review, 2(1), Article 1. https://doi.org/10.54099/ijibmr.v2i1.136

Hidayat and Wastam. (2018). Dasar-Dasar Laporan Keuangan. Uwais Inspirasi Indonesia.

IAI. (2012). Standar Akuntaasi Keuangan. Salemba Empat.

Iskamto, D. (2016). Industri Keuangan Bank Syariah Nasional Dalam Masyarakat Ekonomi ASEAN. Jurnal Ekonomi dan Bisnis Islam (JEBI), 1(1), 16–27.

Iskamto, D., Ghazali, P. L., & Afthanorhan, A. (2019). Analysis Of Customer Decisions In Choosing Credit Financial. Jurnal Manajemen Bisnis (JMB), 32(1), 5–14.

Kamaruddin, K., Wahyudi, A., & Gani, I. (2022). The Effect Of Results Share Level, Third Party Funds, Non Performing Financing On Results-Based Financing Volume In Sharia Banking In Indonesia. Adpebi International Journal of Multidisciplinary Sciences, 1(1), Article 1. https://doi.org/10.54099/aijms.v1i1.261

Markonah, M., Silalahi, S., & Selliamanik, I. (2023). Claim Paying and Reinsurance on Company’s Financial Health. International Journal of Applied Management and Business, 1(1), Article 1. https://doi.org/10.54099/ijamb.v1i1.459

Siswanto, E., & Daniswara, D. R. (2022). Do Financial Performance and Company Characteristics Affect Corporate Social Responsibility (CSR) Disclosure? Adpebi International Journal of Multidisciplinary Sciences, 1(1), Article 1. https://doi.org/10.54099/aijms.v1i1.270

Sugiyono. (2017). Metode Penelitian Bisnis (Pendekatan Kuantitatif, Kualitatif, Kombinasi dan R&D). In Metodelogi Penelitian.

Downloads

Published

2024-10-23

How to Cite

Setiawan, A., Liana, A., Rachmawati, E. ., & Pertami, Y. S. F. (2024). Evaluation of the Effectiveness of the Beneish M-Score Model as a Financial Statement Fraud Detection Tool. ADPEBI International Journal of Business and Social Science, 4(2), 154–165. https://doi.org/10.54099/aijbs.v4i2.949

Issue

Section

Articles

Most read articles by the same author(s)