Open AccessTournament Incentives and Frauds in the Financial Statements
Author(s) -
Hidayatul Khusnah,
Niken Savitri Primasari
Publication year - 2021
Publication title -
procedia business and financial technology
Language(s) - English
Resource type - Journals
ISSN - 2807-131X
DOI - 10.47494/pbft.2021.1.10
Subject(s) - tournament , incentive , business , position (finance) , stock exchange , accounting , competition (biology) , hierarchy , finance , industrial organization , microeconomics , economics , market economy , ecology , mathematics , combinatorics , biology
Incentive theory states that tournament incentives facilitate competition between senior executives, and that only the best will receive large monetary rewards, as well as a superior position in the corporate hierarchy. The purpose of this study was to investigate the effect of tournament incentives on the possibility of fraud in the financial statements of manufacturing companies listed on the Indonesian stock exchange. This study tested 63 data obtained from 7 companies for 6 consecutive years. The data analysis technique in this study used SEM-PLS analysis using the WarpPLS 5.0 software . The results of this study indicate that tournament incentives have a positive effect on the possibility of fraud in financial statements. The greater the level of competition to get a certain position, the greater the possibility of fraud in the financialstatements.