S udies Managemen and Finance Economics, o Jou nal
0504-2644 (online): ISSN 0490,-2644 (p in ): ISSN
5202 No embe 11 Issue 80 Volume
8.317 Fac o : Impac ,09-i11-10.47191/je ms/ 8 DOI: A icle
2147 -7207 No: Page
JEFMS, Volume 08 Issue 11 No embe 2025 www.ije m.co.in Page 7207
Le e age, Capi al Tu no e , and Financial S abili y on Financial S a emen
F aud: Tes ing he Mode a ing E ec o Financial Ta ge
Rasiman1, Agus Ismaya Hasanudin2, yeni Janua si3, Ewing Yu isa Ib ani4
1Doc o al S uden , Accoun ing Depa men , Economic and Business Facul y, Sul an Ageng Ti ayasa Uni e si y, Se ang 42163,
Indonesia
2,3,4Accoun ing Depa men , Economic and Business Facul y, Sul an Ageng Ti ayasa Uni e si y, Se ang 42163, Indonesia
ABSTRACT: This s udy aims o analyze he e ec o le e age, capi al u no e , and inancial s abili y on inancial s a emen aud,
wi h inancial a ge as a mode a ing a iable. The esea ch uses a quan i a i e app oach wi h a sample o 16 manu ac u ing
companies lis ed on he Indonesia S ock Exchange (IDX) in he basic and chemical indus y sec o o he 2017– 2021 pe iod. The
sampling echnique used was pu posi e sampling, and da a we e analyzed using panel da a eg ession h ough E iews 9.0
so wa e. The model selec ed was he Common E ec Model (CEM) a e conduc ing he Chow, Hausman, and Lag ange Mul iplie
es s. The esul s show ha inancial s abili y has a posi i e and signi ican e ec on inancial s a emen aud, while le e age and
capi al u no e ha e no signi ican e ec . Fu he mo e, inancial a ge s eng hens he in luence o inancial s abili y on inancial
s a emen aud bu does no mode a e he ela ionship be ween le e age and capi al u no e wi h inancial s a emen aud.
These indings con ibu e o he li e a u e on aud de ec ion by in eg a ing inancial pe o mance indica o s and manage ial
a ge s, and p o ide p ac ical implica ions o companies and audi o s o iden i y po en ial isks o inancial s a emen
manipula ion.
KEYWORDS: Financial S a emen F aud, Le e age, Capi al Tu no e , Financial S abili y, Financial Ta ge .
I. INTRODUCTION
Financial s a emen aud has eme ged as a majo h ea o he eliabili y and c edibili y o co po a e inancial epo ing
wo ldwide. Acco ding o he Associa ion o Ce i ied F aud Examine s (ACFE), inancial s a emen aud ep esen s he smalles
p opo ion o all aud cases bu esul s in he la ges median losses, a e aging a ound USD 800,000 pe case. This ype o aud
in ol es he in en ional mis ep esen a ion o manipula ion o ma e ial in o ma ion in inancial epo s o decei e s akeholde s
abou a company’s ac ual pe o mance and inancial condi ion (Nu cahyono e al., 2021). In Indonesia, se e al high-p o ile cases
such as hose in ol ing PT Bank Bukopin Tbk and PT Sunp ima Nusan a a Pembiayaan (SNP Finance) illus a e how managemen
misconduc can dis o inancial da a and unde mine in es o con idence. In es iga ions by he O o i as Jasa Keuangan (OJK) ound
ha SNP Finance alsi ied inancial s a emen s o ob ain inancing om mul iple banks, esul ing in es ima ed losses o mo e han
IDR 14 illion (CNBC Indonesia, 2019). Likewise, Bank Bukopin o e s a ed commission and c edi ca d income om 2015 o 2017,
o cing es a emen o i s inancial epo s (CNBC Indonesia, 2018). These e en s demons a e weaknesses in co po a e
go e nance and in e nal con ol sys ems, as well as e hical lapses ha c ea e oppo uni ies o inancial s a emen aud o occu .
The heo e ical ounda ion o his esea ch is Agency Theo y (Jensen & Meckling, 1976), which explains ha con lic s o
in e es a ise be ween p incipals (sha eholde s) and agen s (managemen ). Manage s may engage in oppo unis ic ac ions o
achie e pe sonal goals such as bonuses o epu a ional ewa ds especially when pe o mance e alua ion is based on accoun ing
ou comes (Ra nasa i & Solikhah, 2019). Fu he mo e, he F aud T iangle Theo y p oposed by (Suhendah, 2019) desc ibes ha
aud occu s when p essu e, oppo uni y, and a ionaliza ion coexis . P essu e o achie e inancial a ge s, combined wi h weak
in e nal con ols and a ionaliza ion o une hical beha io , inc eases he likelihood o audulen epo ing (As e ia, 2018).
Empi ical esea ch iden i ies se e al inancial indica o s ha may be associa ed wi h inancial s a emen aud. Le e age e lec s
he company’s dependence on deb inancing. A high le el o le e age inc eases manage ial p essu e o epo a o able
pe o mance o c edi o s and in es o s (Gunde e al., 2017). Capi al u no e measu es he company’s e iciency in u ilizing asse s
o gene a e sales; low capi al u no e may lead manage s o manipula e e enues o asse s o po ay be e e iciency (Nwidobie
Le e age, Capi al Tu no e , and Financial S abili y on Financial S a emen F aud: Tes ing he Mode a ing E ec o
Financial Ta ge
JEFMS, Volume 08 Issue 11 No embe 2025 www.ije m.co.in Page 7208
Ba ine, 2012). Financial s abili y indica es a company’s abili y o main ain consis en inancial condi ions. When s abili y is
h ea ened, managemen may exagge a e asse g ow h o p o i abili y o main ain ma ke con idence (A i e al., 2023).
Ne e heless, p io s udies show inconsis en esul s ega ding he in luence o hese a iables on audulen inancial epo ing
hus lea ing a esea ch gap.
To b idge his gap, his s udy in oduces inancial a ge as a mode a ing a iable. Financial a ge commonly measu ed by
e u n on asse s (ROA) ep esen s manage ial goals o pe o mance benchma ks. Excessi e inancial a ge s can in ensi y
manage ial p essu e o achie e desi ed p o i abili y le els, he eby inc easing he likelihood o manipula i e epo ing (Sep iana,
2022). Wi hin he agency amewo k, such a ge s can s eng hen he ela ionship be ween inancial p essu es and audulen
ac ions, pa icula ly when companies seek o main ain in es o con idence unde declining pe o mance condi ions. The no el y
o his s udy lies in in eg a ing inancial a ios (le e age, capi al u no e , and inancial s abili y) wi h inancial a ge as a
mode a ing ac o , analyzed wi hin Indonesia’s manu ac u ing sec o . This in eg a ion links Agency Theo y and F aud T iangle
Theo y o explain how in e nal pe o mance goals in luence audulen inancial beha io . The e o e, his s udy aims o analyze
he e ec s o le e age, capi al u no e , and inancial s abili y on inancial s a emen aud, and o examine he mode a ing ole
o inancial a ge . The esea ch ocuses on manu ac u ing companies in he basic and chemical indus y sec o lis ed on he
Indonesia S ock Exchange (IDX) du ing he 2017–2021 pe iod, conside ing his sec o ’s signi ican con ibu ion o he economy
and i s exposu e o epo ing p essu e. The indings a e expec ed o en ich he academic discussion on inancial aud de ec ion
and p o ide p ac ical insigh s o egula o s, audi o s, and co po a e managemen in iden i ying and p e en ing audulen
inancial epo ing. A.
II. LITERATURE REVIEW
A. AGENCY THEORY
Agency heo y (Jensen & Meckling, 1976) explains he con lic o in e es be ween owne s (p incipals) and manage s (agen s)
esul ing om he sepa a ion o owne ship and company con ol. Manage s, who ha e supe io in o ma ion abou he company’s
in e nal condi ions, may ac oppo unis ically o achie e pe sonal goals ha a e no always aligned wi h sha eholde s’ in e es s
(Ng & Da omes, 2016). In he con ex o inancial epo ing, his heo y explains how manage s can manipula e accoun ing igu es
o main ain in es o con idence o achie e inancial a ge s when unde pe o mance p essu e (G ediani, 2023). Agency heo y
also p o ides a ounda ion o unde s anding he in luence o le e age, capi al u no e , and inancial s abili y on audulen
inancial epo ing, as hese inancial indica o s can c ea e condi ions o p essu e and oppo uni y ha lead o aud. Addi ionally,
he inclusion o inancial a ge as a mode a ing a iable aligns wi h he no ion ha manage ial incen i es can in ensi y o weaken
oppo unis ic beha io in achie ing company goals.
B. LEVERAGE, FINANCIAL STATEMENT FRAUD
Le e age can in luence he likelihood o inancial s a emen aud h ough he inancial p essu e expe ienced by manage s.
Companies wi h high le e age o en ace p essu e o main ain ce ain inancial a ios and mee obliga ions o c edi o s, which may
encou age manage s o manipula e ea nings o conceal liabili ies o p esen a mo e s able inancial posi ion (Su ama & Lisa, 2018).
On he o he hand, high le e age can also esul in s ic e ex e nal moni o ing by c edi o s, who o e see he company's
compliance wi h deb co enan s and limi manage s’ oppo uni ies o engage in manipula i e p ac ices (Widhayan i & U omo,
2020). The e o e, he impac o le e age on inancial s a emen aud may a y depending on he s eng h o co po a e
go e nance and he le el o ex e nal o e sigh applied.
H1: Le e age has a posi i e e ec on inancial s a emen aud.
C. CAPITAL TURNOVER, FINANCIAL STATEMENT FRAUD
Capi al u no e e lec s a company’s e iciency in using i s o al asse s o gene a e sales. A low capi al u no e a io indica es
ine iciency, which can p essu e managemen o manipula e e enue o asse alues o appea mo e p oduc i e (Nug oho &
Panges u i, 2010). The F aud T iangle Theo y suppo s his ela ionship, sugges ing ha pe o mance p essu e may lead o
audulen ac s when combined wi h a ionaliza ion and oppo uni y. P io esea ch p esen s a ying indings: (Nug oho &
Panges u i, 2010) ound ha ine icien asse u iliza ion inc eases aud isk, while (Ind iasih, 2020) obse ed no signi ican e ec ,
implying ha aud isk may depend on in e nal con ol s eng h and ope a ional con ex .
H2: Capi al u no e has a posi i e e ec on inancial s a emen aud.
D. FINANCIAL STABILITY, FINANCIAL STATEMENT FRAUD
Financial s abili y desc ibes a company’s abili y o main ain consis en inancial pe o mance and a oid inancial dis es (Diana
& Yudian o o, 2023). Companies acing uns able condi ion such as declining p o i s, asse s, o e enues o en expe ience
Le e age, Capi al Tu no e , and Financial S abili y on Financial S a emen F aud: Tes ing he Mode a ing E ec o
Financial Ta ge
JEFMS, Volume 08 Issue 11 No embe 2025 www.ije m.co.in Page 7209
manage ial p essu e o p esen imp o ed pe o mance o in es o s and c edi o s. Based on (Ciellie Ch is abelle San oso & Jesica
Handoko, 2022), when s abili y declines, manage s a e mo e likely o manipula e ea nings o o e s a e asse s o main ain ma ke
con idence. Empi ical s udies suppo his iew, showing ha ins abili y in inancial pe o mance signi ican ly inc eases he isk o
inancial s a emen aud (Pa ase ya, M.T., & Solikhin, 2023), al hough he s eng h o his e ec can a y depending on
moni o ing mechanisms and company size.
H3: Financial s abili y has a posi i e e ec on inancial s a emen aud.
E. FINANCIAL TARGET, LEVERAGE, AND FINANCIAL STATEMENT FRAUD
Companies equi e unding in he o m o capi al o ca y ou hei ope a ional ac i i ies. I he a ailable in e nal unding is
insu icien , ex e nal inancing such as deb is needed. Acco ding o Gunde e al. (2017), le e age is a measu e o a company's
abili y o u ilize asse s and/o unds wi h ixed cos s, such as deb , in o de o achie e i s objec i es. Companies wi h high le e age
le els a e suspec ed o engaging in inancial s a emen aud by a i icially inc easing hei le e age a io. This is done because a
low le e age le el may inc ease he likelihood o losing in es o s. The e o e, companies end o aise hei le e age le els o a oid
his possibili y. Resea ch on he e ec o le e age on audulen inancial s a emen s has p oduced inconsis en indings. A s udy
by Widyan i and Nu ya no (2018) explains ha le e age has a posi i e e ec on audulen inancial s a emen s. In con as ,
esea ch conduc ed by Wima dana and Nu bai i (2018) ound ha le e age has no signi ican e ec on audulen inancial
s a emen s.
H4 : Financial a ge mode a es he in luence o Le e age on inancial s a emen aud.
F. FINANCIAL TARGET, CAPITAL TURNOVER, AND FINANCIAL STATEMENT FRAUD
Resea ch on he e ec o capi al u no e on audulen inancial s a emen s has shown inconsis en esul s. The s udy
conduc ed by Widyan i and Nu ya no (2018) ound ha capi al u no e has a signi ican e ec on audulen inancial s a emen s.
Howe e , a di e en inding was epo ed by Wima dana and Nu bai i (2018), who e ealed ha capi al u no e does no a ec
audulen inancial s a emen s. These inconsis en esul s a e suspec ed o be in luenced by o he ac o s ha may mode a e he
ela ionship be ween capi al u no e and audulen inancial s a emen s. The esea che s suspec ha inancial a ge s may
s eng hen he ela ionship be ween capi al u no e and audulen inancial s a emen s. Acco ding o agency heo y,
managemen ac s as an agen appoin ed by sha eholde s (p incipals) and is esponsible o managing he company o mee
p ede e mined a ge s. A inancial a ge is one o he objec i es es ablished by he p incipal ha mus be achie ed by he agen .
The inancial a ge , which is p oxied by Re u n on Asse s (ROA), is conside ed capable o igge ing managemen o commi aud.
This occu s because he es ablishmen o inancial a ge s inc eases manage ial p essu e o achie e speci ic pe o mance
ou comes, he eby in ensi ying he p essu e o a ain a highe le el o capi al u no e . The combined p essu es om bo h capi al
u no e and inancial a ge s may encou age companies o mee hei goals h ough a ious means—e en h ough he
manipula ion o inancial s a emen s.
H5 : Financial a ge mode a es he in luence o Capi al Tu no e on inancial s a emen aud.
G. FINANCIAL TARGET, FINANCIAL STABILITY, AND FINANCIAL STATEMENT FRAUD
Resea ch on he e ec o inancial s abili y on audulen inancial s a emen s has p oduced inconsis en esul s. A s udy
conduc ed by Annisya e al. (2016) ound ha inancial s abili y has a posi i e e ec on audulen inancial s a emen s. Howe e ,
a di e en inding was epo ed by P ayoga and Suda maji (2019), who concluded ha inancial s abili y has no e ec on
audulen inancial s a emen s. These con lic ing esul s a e suspec ed o be due o he p esence o o he ac o s in luencing he
ela ionship be ween inancial s abili y and audulen inancial s a emen s. The esea che assumes ha he exis ence o a
inancial a ge may s eng hen he ela ionship be ween inancial s abili y and audulen inancial s a emen s. Agency heo y
s a es ha managemen ac s as an agen appoin ed by sha eholde s (p incipals) and is asked wi h managing he company and
mee ing he a ge s ha ha e been se . A inancial a ge is one o he objec i es es ablished by he p incipal ha mus be achie ed
by he agen .
H6 : Financial a ge mode a es he in luence o Financial S abili y on inancial s a emen aud.
III. METHODOLOGY
This s udy employs a causal quan i a i e esea ch me hod o examine he in luence o le e age (X1), capi al u no e (X2), and
inancial s abili y (X3) on inancial s a emen aud (Y), wi h inancial a ge (Z) as a mode a ing a iable. The quan i a i e
app oach is used o es he ela ionship be ween a iables objec i ely h ough s a is ical da a analysis, while he causal me hod
aims o de e mine he cause-and-e ec ela ionship be ween independen and dependen a iables (Sugiyono, 2020). The
Le e age, Capi al Tu no e , and Financial S abili y on Financial S a emen F aud: Tes ing he Mode a ing E ec o
Financial Ta ge
JEFMS, Volume 08 Issue 11 No embe 2025 www.ije m.co.in Page 7210
popula ion o his s udy includes manu ac u ing companies in he basic and chemical indus y sec o lis ed on he Indonesia S ock
Exchange (IDX) du ing he 2017–2021 pe iod. The pu posi e sampling echnique was used wi h he ollowing c i e ia: (1)
companies lis ed on he IDX du ing he 2017–2021 pe iod, (2) companies ha published comple e annual inancial s a emen s o
i e consecu i e yea s using he Indonesian Rupiah (IDR) as he epo ing cu ency, and (3) companies ha did no expe ience
losses o wo o mo e yea s du ing he obse a ion pe iod.
Table 1. Sample Selec ion
Num
In o ma ion
Sum
1
Manu ac u ing companies in he basic and chemical indus y sec o lis ed
on he IDX 2017–2021
79
2
Companies ha did no publish inancial s a emen s o i e yea s o used
o eign cu encies
-38
3
Companies ha epo ed losses o wo o mo e yea s
-25
4
Final sample
16
5
Numbe o yea s o obse a ion
5
6
To al panel da a obse a ions
80
Sou ce: IDX da a p ocessed, 2023
A e collec ing da a om he inancial s a emen s o companies lis ed on he Indonesia S ock Exchange o he 2017–2021
pe iod, da a p ocessing and analysis we e ca ied ou using EViews 12 so wa e. EViews is a s a is ical and econome ic so wa e
speci ically designed o p ocessing panel da a, making i ideal o his s udy. The dependen a iable in his s udy is inancial
s a emen aud (FRAUD), measu ed using he Beneish M-Sco e model, which de ec s he likelihood o ea nings manipula ion
based on eigh inancial a ios: DSRI, GMI, AQI, SGI, DEPI, SGAI, LVGI, and TATA (Be na d e al., 1999). The independen a iables
consis o le e age, capi al u no e , and inancial s abili y. Le e age is measu ed using he Deb - o-Equi y Ra io (DER), which
e lec s he company’s abili y o mee obliga ions h ough equi y (Fe onicha e al., 2017). Capi al u no e is measu ed using he
a io o sales o o al asse s, which shows he e iciency o asse u iliza ion in gene a ing e enue. The mode a ing a iable,
inancial a ge , is measu ed using Re u n on Asse s (ROA), which indica es managemen ’s abili y o achie e p o i abili y a ge s
h ough he e ec i e use o asse s (Hend i e al., 2019).
IV. RESULTS AND DISCUSSION
A. Desc ip i e Analysis
Table 2. Desc ip i e Analysis
F aud
Le e age
Capi al u no e
Financial
s abili y
Financial
a ge
Mean
-2.736492
0.378137
7.834045
0.068305
0.056908
Median
-2.700743
0.394192
3.995547
0.057710
0.044422
Maximum
-1.877619
0.661770
147.6006
0.617569
0.198298
Minimum
-4.092422
0.081293
-69.61173
-0.489116
0.001743
S d. De .
0.364412
0.156848
25.08007
0.120939
0.041466
Obse a ions
40
40
40
40
40
Sou ce: Da a p ocessed wi h E iews 9.0, 2023.
Based on he desc ip i e analysis, he a e age alue o inancial s a emen aud (FRAUD) in he sample companies is -
2.736492, wi h a median o -2.700743, indica ing ha he manipula ion endency in inancial epo ing is ela i ely low. Howe e ,
some companies s ill exhibi highe manipula ion alues (maximum -1.877619), while o he s show much lowe endencies
(minimum -4.092422). Le e age (DER) shows an a e age alue o 0.378137 and a median o 0.394192, meaning ha on a e age,
companies inance app oxima ely 37.8% o hei o al asse s wi h deb , e lec ing a mode a e le el o le e age ac oss he sample.
Capi al u no e (WCT) has an a e age o 7.834045 wi h a high s anda d de ia ion o 25.08007, showing conside able a ia ion in
asse u iliza ion e iciency among i ms, whe e some companies achie ed e y high u no e (maximum 147.6006) while o he s
Le e age, Capi al Tu no e , and Financial S abili y on Financial S a emen F aud: Tes ing he Mode a ing E ec o
Financial Ta ge
JEFMS, Volume 08 Issue 11 No embe 2025 www.ije m.co.in Page 7211
we e ela i ely ine icien (minimum -69.61173). Financial s abili y (ACHANGE) has a mean alue o 0.068305 and a median o
0.057710, sugges ing ha mos i ms main ain s able inancial condi ions, al hough a ia ions exis be ween he highes
(0.617569) and lowes (-0.489116) alues. Meanwhile, he inancial a ge (ROA) eco ds an a e age o 0.056908 and a median o
0.044422, indica ing ha companies gene ally main ain mode a e p o i abili y le els, wi h he highes eaching 0.198298 and he
lowes a 0.001743. The s anda d de ia ion o each a iable shows ha he e is subs an ial a ia ion in capi al u no e , while
le e age, inancial s abili y, and inancial a ge demons a e mode a e a iabili y. All o his da a was p ocessed and analyzed
using EViews 9, which acili a es u he quan i a i e es ing o he e ec s o independen and mode a ing a iables on inancial
s a emen aud.model.
B. Panel Da a Model Selec ion
Table 3. Model Selec ion
Model Tes
Resul
Conclusion
Chow Tes
0.7663
CEM
Hausman es
0.2331
REM
Lag ange Mul iplie
Tes
0.2938
CEM
Sou ce: E iews 9.0 Ou pu
Based on he esul s o he model selec ion es , he Chow es p oduced a p obabili y alue o 0.7663, indica ing ha he
Common E ec Model (CEM) is p e e ed o e he Fixed E ec Model (FEM). Fu he mo e, he Hausman es yielded a p obabili y
alue o 0.2331, sugges ing ha he Random E ec Model (REM) is mo e sui able han he Fixed E ec Model (FEM). Meanwhile,
he Lag ange Mul iplie es shows a p obabili y alue o 0.2938, which suppo s he selec ion o he Common E ec Model (CEM)
o e he Random E ec Model (REM). Thus, based on he h ee model selec ion es s, i can be concluded ha he eg ession
es ima ion in his s udy uses he Common E ec Model (CEM) as he mos app op ia e app oach o analyze he in luence o
le e age, capi al u no e , and inancial s abili y on inancial s a emen aud wi h inancial a ge as a mode a ing a iable.
C. Hypo hesis Tes ing
Table 4. Hypo hesis Tes ing Table
Va iable
Coe icien
S d. E o
-S a is ic
P ob.
C
-2.663666
0.137711
-19.34239
0.0000
DER
-0.192262
0.265719
-0.723555
0.4716
WCT
-0.001577
0.001590
-0.991930
0.3244
ACHANGE
0.982341
0.330000
2.976793
0.0039
ROA
-0.964114
1.014011
-0.950792
0.3448
R-squa ed
0.123170
F P ob
0.040642
Sou ce: Da a p ocessed wi h E iews 9.0, 2023.
The eg ession analysis e ealed ha he deb o equi y a io (DER) had a nega i e bu s a is ically insigni ican e ec on
ea nings managemen (β = -0.192262; p = 0.4716). This indica es ha he i m's le e age, measu ed as he p opo ion o o al deb
o equi y, does no signi ican ly d i e oppo unis ic manage ial beha io in he sample i ms. F om he pe spec i e o agency
heo y, le e age is heo e ically expec ed o impose discipline on manage s by inc easing obliga ions o c edi o s, he eby
educing hei disc e ion o e epo ed ea nings (Ti man & Wessels, 2007). Howe e , he insigni ican coe icien sugges s ha in
p ac ice, DER alone may no be su icien o in luence manage ial decisions, especially in i ms wi h s ong go e nance
mechanisms, independen audi s, and es ablished in e nal con ol sys ems (DeAngelo & Masulis, n.d.). This inding highligh s ha
while inancial s uc u e is impo an o co po a e s a egy, i s di ec impac on ea nings managemen may be limi ed wi hou
complemen a y o e sigh mechanisms.
Simila ly, wo king capi al u no e (WCT) exhibi ed a nega i e bu insigni ican e ec on ea nings managemen (β = -0.001577;
p = 0.3244). This implies ha ope a ional e iciency, measu ed as he u no e o cu en asse s ela i e o sales, does no
subs an ially in luence manage s’ p opensi y o manipula e inancial s a emen s. In heo y, highe WCT indica es e icien
Le e age, Capi al Tu no e , and Financial S abili y on Financial S a emen F aud: Tes ing he Mode a ing E ec o
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JEFMS, Volume 08 Issue 11 No embe 2025 www.ije m.co.in Page 7212
esou ce u iliza ion, which should limi manage ial disc e ion in adjus ing epo ed ou comes. Howe e , he empi ical e idence
sugges s ha WCT alone does no su icien ly cons ain manage ial beha io , likely because ope a ional e iciency is only one o
many ac o s a ec ing manage ial decisions (Se iowa i e al., 2023). Manage s may s ill exe cise disc e ion o e epo ing p ac ices
despi e high ope a ional e iciency i go e nance and moni o ing mechanisms a e weak o du ing pe iods o s a egic change.
In con as , asse change (ACHANGE) had a posi i e and s a is ically signi ican e ec on ea nings managemen (β = 0.982341;
p = 0.0039), indica ing ha i ms expe iencing s uc u al o asse - ela ed changes a e mo e likely o engage in ea nings
manipula ion. This inding aligns wi h he heo e ical amewo k o agency heo y, which posi s ha pe iods o o ganiza ional
ans o ma ion such as me ge s, acquisi ions, di es men s, o la ge capi al in es men s p o ide manage s wi h inc eased
disc e ion and oppo uni ies o in luence epo ed inancial ou comes o se e pe sonal o s a egic objec i es (Jensen & Meckling,
1976). The signi ican posi i e coe icien sugges s ha asse adjus men s a e a c i ical ac o in manage ial oppo unism,
emphasizing he impo ance o moni o ing and in e nal con ol du ing ansi ional pe iods.
Re u n on asse s (ROA) showed a nega i e coe icien (β = -0.964114) bu was no s a is ically signi ican (p = 0.3448),
indica ing ha p o i abili y does no signi ican ly impac manage ial beha io in he con ex o his s udy. While highe p o i abili y
could heo e ically mo i a e manage s o manipula e ea nings o achie e pe o mance a ge s o secu e bonuses, he lack o
signi icance highligh s ha inancial pe o mance alone does no necessa ily igge oppo unis ic epo ing. This esul is
consis en wi h p io esea ch sugges ing ha manage ial disc e ion and go e nance quali y play mo e subs an ial oles han
p o i abili y me ics in shaping inancial epo ing beha io (A ms ong e al., 2010). Thus, ea nings managemen may occu
independen ly o cu en p o i abili y le els, pa icula ly when o e sigh mechanisms a e inadequa e o du ing pe iods o
s uc u al change.
The eg ession model demons a ed an R-squa ed o 0.123170, indica ing ha app oxima ely 12.3% o he a iance in ea nings
managemen is explained by DER, WCT, ACHANGE, and ROA. Al hough his R-squa ed alue is ela i ely low, i is common in
beha io al and manage ial s udies, whe e nume ous unobse ed ac o s, such as co po a e cul u e, manage ial incen i es, and
ex e nal p essu es, in luence ou comes (Healy, 1998). The F-s a is ic p obabili y o 0.040642 (<0.05) con i ms ha he o e all
model is s a is ically signi ican , indica ing ha he se o independen a iables collec i ely in luences ea nings managemen ,
e en i indi idually some a e no signi ican .
In ep e a ion Model 1
Whe e Y ep esen s ea nings managemen , DER ep esen s he deb - o-equi y a io, WCT deno es wo king capi al u no e ,
ACHANGE indica es asse change, and ROA s ands o e u n on asse s. The cons an e m (C = -2.663666) e lec s he baseline
le el o ea nings managemen when all independen a iables a e held a ze o. The posi i e coe icien o ACHANGE unde sco es
ha manage ial disc e ion is signi ican ly associa ed wi h s uc u al changes in asse s, p o iding oppo uni ies o engage in
ea nings managemen p ac ices. Con e sely, he nega i e bu insigni ican coe icien s o DER, WCT, and ROA indica e ha hese
a iables alone a e no su icien de e minan s o ea nings manipula ion, highligh ing he necessi y o conside ing addi ional
go e nance, egula o y, and ins i u ional mechanisms o moni o and con ol manage ial disc e ion e ec i ely.
These esul s ca y impo an implica ions o bo h co po a e go e nance and audi ing p ac ices. The signi ican e ec o asse
change sugges s ha audi o s and egula o s should pay pa icula a en ion o i ms unde going subs an ial asse modi ica ions,
as hese pe iods a e inhe en ly mo e suscep ible o disc e iona y epo ing. Enhanced in e nal con ols, igo ous audi p ocedu es,
and anspa en disclosu e equi emen s du ing such pe iods a e c ucial o mi iga e he isk o oppo unis ic ea nings
manipula ion. In addi ion, inancial le e age, ope a ional e iciency, and p o i abili y should be conside ed in combina ion wi h
go e nance mechanisms a he han in isola ion when assessing a i m's isk o ea nings managemen . Collec i ely, hese indings
p o ide s ong e idence ha s uc u al and accoun ing changes se e as a p ima y d i e o ea nings managemen , while o he
inancial a ios equi e con ex ual e alua ion o unde s and hei in luence ully.
In summa y, his s udy con i ms ha asse change is he p ima y ac o d i ing ea nings managemen , whe eas DER, WCT, and
ROA do no indi idually exhibi signi ican e ec s. The eg ession analysis highligh s he c i ical ole o e en -d i en oppo uni ies,
such as asse adjus men s, in enabling manage ial disc e ion and inancial epo ing manipula ion. These indings a e consis en
wi h p io empi ical s udies on ea nings managemen (Elma zouky, 2022) and o e p ac ical guidance o audi o s, egula o s, and
co po a e go e nance bodies o s eng hen o e sigh mechanisms, pa icula ly du ing pe iods o subs an ial s uc u al changes
wi hin he i m.
In ep e a ion Model 2
The esul s o he hypo hesis es o le e age on inancial s a emen aud mode a ed by inancial a ge show a signi icance
le el o -0.723555, which is smalle han he signi icance le el o 0.05, wi h a coe icien alue o -0.192262. These esul s indica e
Le e age, Capi al Tu no e , and Financial S abili y on Financial S a emen F aud: Tes ing he Mode a ing E ec o
Financial Ta ge
JEFMS, Volume 08 Issue 11 No embe 2025 www.ije m.co.in Page 7213
ha he inancial a ge mode a es he e ec o le e age on inancial s a emen aud. Thus, H1 in his s udy is ejec ed. The
esul s o he hypo hesis es o capi al u no e on inancial s a emen aud mode a ed by inancial a ge show a signi icance
le el o -0.991930, which is smalle han he signi icance le el o 0.05, wi h a coe icien alue o -0.001577. These esul s indica e
ha he inancial a ge does no mode a e he ela ionship be ween capi al u no e and inancial s a emen aud. The e o e,
H2 in his s udy is ejec ed. The esul s o he hypo hesis es o inancial s abili y on inancial s a emen aud mode a ed by
inancial a ge show a signi icance le el o 2.976793, which is g ea e han he signi icance le el o 0.05, wi h a coe icien alue
o 0.982341. These esul s indica e ha he inancial a ge does no mode a e he ela ionship be ween inancial s abili y and
inancial s a emen aud. The e o e, H3 in his s udy is accep ed.
V. CONCLUSIONS
Based on he esul s o his s udy, se e al key indings eme ge conce ning he in luence o le e age, capi al u no e , and
inancial s abili y on inancial s a emen aud, wi h inancial a ge s se ing as a mode a ing a iable in manu ac u ing companies
wi hin he basic chemical and indus ial sec o s lis ed on he Indonesia S ock Exchange om 2017 o 2021. Fi s , le e age was
ound o ha e an insigni ican e ec on inancial s a emen aud, indica ing ha he le el o deb in a i m does no di ec ly
inc ease o dec ease he endency o manipula e inancial s a emen s. Second, capi al u no e was also shown o ha e no
signi ican e ec , sugges ing ha ope a ional e iciency and he speed o asse u iliza ion do no meaning ully impac audulen
epo ing p ac ices. Thi d, inancial s abili y, measu ed h ough asse g ow h o inancial obus ness indica o s, was ound o ha e
a posi i e and signi ican e ec on inancial s a emen aud, implying ha i ms expe iencing g ow h o shi s in inancial
s uc u e may be mo e suscep ible o audulen epo ing, po en ially o mee in e nal o ma ke expec a ions. Fu he mo e, he
p esence o inancial a ge s as a mode a ing a iable did no signi ican ly al e he in luence o le e age o capi al u no e on
aud, ye i appea ed o s eng hen he ela ionship be ween inancial s abili y and audulen epo ing, indica ing ha p essu e
o achie e p ede e mined inancial objec i es can exace ba e oppo unis ic beha io s. The de e mina ion coe icien (R²) showed
ha a po ion o he a iance in inancial s a emen aud is explained by hese a iables, highligh ing ha o he o ganiza ional,
manage ial, o ma ke ac o s may also con ibu e o audulen p ac ices. O e all, hese indings unde sco e he c i ical ole o
inancial s abili y and he mode a ing e ec o inancial a ge s in in luencing he occu ence o inancial s a emen aud,
p o iding impo an implica ions o egula o s, audi o s, and co po a e go e nance mechanisms o be e moni o and mi iga e
audulen p ac ices in manu ac u ing i ms.
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