Testing of Fraudulent Financial Statements With the Beneish M-Score Model for Manufacturing Companies Listed in the Indonesian Stock Exchange


Fraudulent financial statements are disclosures of a company’s financial condition which are intentionally made inaccurate by eliminating values. This study aimed to examine the effect of using the Beneish M-Score model against fraud reports of manufacturing companies listed in the Indonesian Stock Exchange in 2016 -2018. Purposive sampling was used and the sample consisted of 69 companies. The results showed that the Days Sales in Receivables Index, Gross Margin Index and Total Accrual to Total Asset had a significant positive effect on financial statement fraud, while the Asset Quality Index, Sales Growth Index, Depreciation Index, Sales General and Administrative Expenses Index, and Leverage Index did not affect fraudulent financial statements.

Keywords: fraud, Beneish, logistic regression

[1] Association of Certified Fraud Examiners. 2016. Report to nations. Jakarta: SCFE - Indonesia Chapter #111, p.11

[2] Beneish, Messod D. 1997. Detecting GAAP Violation: Implications for Assesing Earning Management Aming Firm with Extreme Financial Performance. Journal of Accounting and Public Policy. 16(3). p.271- 390.

[3] Fadilah, Y. Penerapan model Beneish M-Score dan analisis rasio untuk mendeteksi kecurangan laporan keuangan. Jurnal Riset Akuntansi. 2019;8(3). P.1-10

[4] Hantono, H.. Deteksi financial statement fraud melalui model Beneish pada perusahaan BUMN. Jurnal Manajemen Bisnis dan Inovasi. 2018; 5(3).135-150.

[5] Venny S, Arif MF. Detecting financial statement fraud using the Beneish M-score Model (a study of manufacturing companies listed on the Indonesian stock exchange. Journal of Accounting & Economic UNPGRI Kediri. 2020;5(2). p.92-99.