Financial Stability, Financial Target, and External Pressure on Financial Statement Fraud: An Empirical Study of Mining Companies Listed on the Indonesia Stock Exchange (2019–2023)

Abstract

Financial statement fraud remains a critical concern for publicly traded companies, particularly when management conceals unfavorable financial realities to meet stakeholder expectations. Method: This study examines the influence of financial stability, financial targets, and external pressure on financial statement fraud among mining companies listed on the Indonesia Stock Exchange during 2019-2023. Employing purposive sampling, 95 observations were analyzed using binary logistic regression to test hypotheses regarding fraud determinants. Results: Findings reveal that financial stability significantly and positively affects financial statement fraud (p = 0.003), while financial targets and external pressure demonstrate no significant influence (p > 0.05). Simultaneously, all variables collectively impact fraud occurrence (p = 0.000). Conclusion: This research contributes to fraud detection literature by validating agency theory and fraud triangle theory within mining sector contexts, providing empirical evidence that financial instability serves as the primary fraud predictor in capital-intensive industries. Practical implications guide auditors, regulators, and management in developing targeted fraud prevention strategies.

Keywords

External Pressure Financial Stability Financial Target Financial Statement Fraud F-Score