Determinants of Fraudulent Financial Reporting and Whistleblowing System: Applying Theory of Planned Behavior

Authors: Imam Ghozali, Tarmizi Achmad, Imang Dapit Pamungkas

Abstract: The purpose of this study is to examine and analyze the influence of managerial attitudes toward fraudulent financial reporting, subjective norms of managers, perceived behavioral control, manager’s moral obligation to the intention of managers to commit fraudulent financial reporting. Testing and analyzing the influence of the intention of managers to commit fraudulent financial reporting to the behavior of managers committing fraudulent financial reporting. Testing and analyzing whistleblowing system as moderating the relationship of intention of managers to commit fraudulent financial reporting to the behavior of managers doing fraudulent financial reporting. The method of data analysis in this study uses Structural Eqution Modeling. The data processing of this research uses Warp PLS application version 5.0. The research sample is managers accounting in state-owned enterprises throughout Indonesia. The results of hypothesis testing prove the manager’s attitude towards fraudulent financial reporting does not significantly influence the intention of managers to commit fraudulent financial reporting. The results of this test prove that subjective norms, perceived behavioral control and manager’s moral obligations have a significant negative effect on the intention of managers to commit financial reporting fraud. The intention of managers to commit financial reporting fraud has a significant positive effect on the behavior of managers doing fraudulent financial reporting. Whistleblowing system as a moderating variable is proven to weaken the relationship of intention of managers to commit fraudulent financial reporting to the behavior of managers committing fraudulent financial reporting.

WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / 2224-2899, Volume 16, 2019, Art. #44

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Imam Ghozali, Tarmizi Achmad, Imang Dapit Pamungkas, "Determinants of Fraudulent Financial Reporting and Whistleblowing System: Applying Theory of Planned Behavior," WSEAS Transactions on Business and Economics, vol. 16, pp. 393-402, 2019
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