Abstract:
This research aims to obtain empirical evidence of the factors explained by fraud triangle to possibility of financial statements fraud. The dependent variable is represented by proxy Earnings Management. While the independent variables are represented by several proxies which are Asset Growth (AGROW), Leverage (LEV), Number of Shares Owned by Management (OSHIP), Return on Assets (ROA), and Ratio of Independent Board (BDOUT).
The population of this research is manufacturing companies listed in Indonesia Stock Exchange for the period 2012 – 2013. This research used 50 sample companies. Statistical data analysis method of this research used linear regression.
The results of this research indicate that External Pressure proxied by Leverage (LEV) and Personal Financial Need proxied by Number of Shares Owned by Management (OSHIP) influence significantly to the possibility of financial statements fraud. While Financial Stability proxied by Asset Growth (AGROW), Financial Target proxied by Return on Assets (ROA), and Ineffective Monitoring proxied by Ratio of Independent Board (BDOUT) has no significant influence to the possibility of financial statements fraud.
