FRAUD DETECTION THROUGH FINANCIAL STATEMENT IN ISLAMIC BANKS WITH FRAUD PENTAGON THEORY

This aim of this research was to detect fraud in financial statements with Fraud Pentagon Theory. Fraud pentagon theory (Crowe, 2011) is development of previous fraud theory. There are fraud triangle by Cressey (1953) and fraud diamond theory by Wolfe and Hermanson (2004). This research used an Islamic Banks listed on OJK as a sample with purposive sampling method for choosing the sample. The number of samples obtained are 55 samples analized by panel data regression using Eviews9. The result of this research showed that two variables of fraud pentagon theory, consisting pressure (financial stability) and opportunity (nature of industry), effect to detect financial statement fraud. While, another variable pressure (financial target, external pressure), Opportunity (ineffective monitoring), rationalization (change in auditor, total accrual to total asset ratio), competence (director change, work experience), arrogance (frequent number of CEO‘s picture) can not effect to detect financial statement fraud