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Vol. 1 No. 3 (2026): May

The Effect of External Pressure and Financial Targets on Financial Statement Fraud

https://doi.org/10.35912/ambus.v1i3.4170

Abstract

Purpose: This study examines the impact of external pressure and financial targets on financial statement fraud in automotive manufacturing firms listed on the Indonesia Stock Exchange (IDX) between 2020 and 2024. This study uses leverage as a proxy for external pressure and Return on Assets (ROA) as a financial target, analyzing 60 firm-year observations from 12 companies.

Research Methodology: Multiple linear regression and descriptive statistics were employed to analyze the relationship between external pressure, financial targets, and financial statement fraud, using the Beneish M-Score model to identify fraud.

Results: The results indicate that although external pressure and financial targets fluctuate, they do not significantly affect financial statement fraud. These findings suggest that other unexamined factors may have a more substantial impact on fraud in the automotive sector.

Conclusions: This study concludes that external pressure and financial targets alone are insufficient to explain financial statement fraud. Other factors, such as corporate governance and internal controls, may play a more significant role in influencing fraudulent reporting.

Limitations: This study is limited by its focus on automotive manufacturing firms and the use of leverage and ROA as proxies for external pressure and financial targets. Future studies should explore additional factors that influence financial fraud.

Contributions: This study provides insights into the relationship between external pressures, financial targets, and financial fraud, contributing to further research in this field.

Keywords

Decisions Emotional AI Important Role

How to Cite

Fahreza, M. A. ., Zaharuddin , Z. ., & Safariningsih, R. T. H. (2026). The Effect of External Pressure and Financial Targets on Financial Statement Fraud. Advances in Management and Business Studies, 1(3), 199–207. https://doi.org/10.35912/ambus.v1i3.4170

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Authors

1 . Muhammad Alvin Fahreza
Universitas Panca Sakti, Bekasi, Indonesia
2 . Zaharuddin Zaharuddin
Universitas Panca Sakti, Bekasi, Indonesia
3 . Ratna Tri Hari Safariningsih
Universitas Panca Sakti, Bekasi, Indonesia

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Vol. 1 No. 3 (2026): May
Section: Articles
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