Beneish Model: Detection of Indications of Financial Statement Fraud Using CEO Characteristics

Siti Masruroh(1*), Anita Carolina(2),

(1) Universitas Trunojoyo Madura
(2) Universitas Trunojoyo Madura
(*) Corresponding Author


The study aims to analyze the influence of CEO characteristic factors on indications of financial statement fraud using the Beneish Model. Based on the upper echelon theory, this study proposes six hypotheses which are tested using logistic regression analysis. This study uses secondary data derived from financial statements or annual reports of mining companies listed on the Indonesia Stock Exchange from 2015 to 2019. The results of this study show that CEO characteristics in the form of CEO age, educational background, and work experience cannot be used as indicators that can detect financial statement fraud. Meanwhile, some other characteristics that are still the focus of this study, such asCEO’s gender, tenure, and nationality havean influence on indications of financial statement fraud. So, it can be concluded that the CEO characteristics that have a link in detectingfinancial statement fraud can be considered fraud prevention efforts.


Beneish Model; CEO Characteristics; Financial Statement Fraud

Full Text:



ACFE. (2020) Report to The Nations. USA: Association of Certified Fraud Examiners.

Adiasih, P., & Kusuma, I. (2011) ‘Manajemen Laba pada Saat Pergantian CEO (Dirut) di Indonesia’, Jurnal Akuntansi dan Keuangan, 13(2), pp. 67-79.

AICPA, & SAS No. 99. (2002) Consideration of Fraud in a Financial Statement Audit. New York: AICPA.

Alhmood, M., Shaari, H., & Al-dhamari, R. (2020) ‘CEO Characteristics and Real Earning Management in Jordan’, International Journal of Financial Research, 11(4), pp. 255-266.

Ali, A., & Zhang, W. (2015) ‘CEO Tenure and Earnings Management’, Journal of Accounting and Economics, 9(1), pp. 60-79.

Arun, T., Almahrog, Y., & Aribi, Z. (2015) ‘Female Directors and Earnings Management: Evidence from UK companies’, International Review of Financial Analysis, 39, pp. 137-146.

Barker, V., & Mueller, G. (2002) ‘CEO Characteristics and Firm R&D Spen-ding’, Management Science, 18(6), pp. 782-801.

Basmar, N., & Ruslan. (2021) ‘Analisis Perbandingan Model Beneish M Score dan Fraud Score dalam Mendeteksi Kecurangan Laporan Keuangan’, SEIKO: Journal of Mana-gement & Business, 4(2), pp. 428-440.

Beneish, M. (1999) The Detection of Earnings Manipulation. Association for Investment Management and Research, 24-36.

Bonny, P., Goode, S., & Lacey, D. (2015) ‘Revisiting Employee Fraud: Gen-der, Investigation Outcomes And Offender Motivation’, Journal of Financial Crime, 12(4), pp. 447-467.

Bouaziz, D., Salhi, B., & Jarboui, A. (2020) ‘CEO Characteristics and Earnings Management: Empirical Evidence from France’, Journal of Financial Reporting and Accounting, 18(1), pp. 77-110.

Badan Pusat Statistik. (2020) Indeks Tendensi Bisnis. Jakarta: BPS-Statistics Indonesia.

Brennan, N., & Mc. Cafferty , J. (1997) ‘Corporate Governance Practices in Irish Companies’, Irish Business and Administrative Research, pp. 116-135.

Brouthers, K., Brouthers, L., & Werner, S. (2000) ‘Influences on Strategic Decision-making in the Dutch Financial Services Industry’, Journal of Management, 26(5), pp. 863–883.

Cai, Y., & Sevilir, M. (2012) ‘Board Connections and M&A Transactions’, Journal of Financial Economics, 103(2), pp. 327-349. doi:

Cheng, L., & Leung, T. (2012) ‘The Effects of Management Demography on Auditor Choice and Earnings Quality: Evidence from China’, Review of Pacific Basin Financial Markets and Policies, 15(2), pp. 1-37. doi:

Chou, Y., & Chan, M. (2018) ‘The Impact of CEO Characteristics on Real Earnings Management: Evidence from the US Banking Industry’, Journal of Applied Finance & Banking, 8(2), pp. 17-44.

Crutchley, C., Jensen, M., & Marshall, B. (2007) ‘Climate for Scandal: Cor-porate Environments that Contribute to Accounting Fraud’, The Financial Review, 4(2), pp. 53-73.

Cumming, D., Leung, T., & Rui, O. (2015) ‘Gender Diversity and Securities Fraud’, Academy of Management Journal, 58(5), pp. 1572-1593.

Daft, R. (2006) Manajemen Ed. 6. Jakarta: Salemba Empat.

Dodge, M. (2009) Women and White - Collar Crime. Prentice Hall, NJ: Upper Saddle River.

Feng, M., Ge, W., Luo, S., & Shevlin, T. (2011) ‘Why do CFOs Become Involved in Material Accounting Manipulations?’, Journal of Accoun-ting and Economics, 51, pp. 21-36.

Fredrickson, J. (1985) ‘Effects of Decision Motive and Organizational Perfor-mance Level on Strategic Decision Processes’, Academy of Management Journal, 28(4), pp. 821-843.

Frischanita , Y., & Bernawati, Y. (2020) ‘The Effect of CFO Demographics on Fraudulent Financial Reporting’, Jurnal Akuntansi, 34(1), pp. 21-36.

Frischanita, Y., & Bernawati, Y. (2020) ‘The Effect of CFO Demographics on Fraudulent Financial Reporting’, Jurnal Akuntansi, 24(1), pp. 21-36.

Ghozali. (2016) Aplikasi Analisis Multivariete Dengan Program IBM SPSS. Semarang: Badan Penerbit Universitas Diponegoro.

Hambrick, D. (2007) ‘Upper Echelons Theory: An Update‘, Academy of Management Review, 32(2), pp. 334–343.

Hambrick, D., & Mason, P. (1984) ‘Upper Echelons: The Organozation as a Reflection of Its Top Managers’, Academy of Management Review, 9(2), pp. 193-206.

Hiliard, T., & Neidermeyer, P. (2018) ‘The Gendering of Fraud: An International Investigation’, Journal of Financial Crime, pp. 1-34.

Hitt, M., & Tyler, B. (1991) ‘Strategic Deci-sion Models: Integrating Different Perspectives’, Strategic Management Journal, 22(5), pp. 327-351.

Huang, H., Green, E., & Lee, C. (2012) ‘CEO Age and Financial Reporting Quality’, American Accounting Asso-ciation, 26(4), pp. 725-740.

Huang, S. K. (2013) ‘The Impact of CEO Characteristics on Corporate Sustain-able Development’, Corporate Social Responsibility and Environmental Management, 20(4), pp. 234-244.

Hugo, J. (2019) ‘Efektivitas Model Beneish M-Score Dan Model F-Score Dalam Mendeteksi Kecurangan Laporan Keuangan’, Jurnal Muara Ilmu Ekonomi dan Bisnis, 3(1), pp. 165-175.

Jonsson, C., & Tarukoski, E. (2017) How Does an Appointed Ceo Influence the Stock Price? A Multiple Regression Approach.

Novilia, O., & Nugroho, P. (2016) ’Peng-aruh Manajemen Puncak Wanita terhadap Manajemen Laba’, Dina-mika Akuntansi, Keuangan dan Per-bankan, 5(1), pp. 27-45.

Oxelheim, L., & Randoy, T. (2003) ‘The Impact of Foreign Board Membership on Firm Value’, Journal of Banking & Finance, 27(12), pp. 2369-2392.

Patmawati, Rahmawati, Meita, &Hidayat. (2021) Komparasi Akurasi Tiga Model Deteksi Financial Statement Fraud: Model Beneish M-Score, F-Score dan Altman Z-Score. Project Report.

Republik Indonesia. (2007) UU RI No. 40 Tahun 2007.

Robbins, S. P. (2007) Perilaku Organisasi. Jakarta: PT Indeks.

Schrand, C., & Zechman, S. (2012) ‘Executive Over Confidence and the Slippery Slope to Financial Misreporting’, Journal of Accounting and Economics, 53(1), pp. 311-329.

Simsek, Z. (2007) ‘CEO Tenure and Organizational Performance: an Intervening Model’, Strategic Management Journal, 28(6).

Stoller, R. (1968) Sex and Gender; On The Development of Masculinity and Femininity. New York: Science House.

Troy, C., Smith, K., & Dominp, M. (2011) ‘CEO Demographics and Accounting Fraud: Who is More Likely to Rationalize Illegal Acts?’, Strategic Organization, 9(4), pp. 259–282.

Zahra, S., Rasheed, A., & Priem, R. (2007) Understanding the Causes and Effects of Top Management Fraud,’ Organizational Dynamics, 36(2), pp. 122-139.


Article Metrics

Abstract view : 691 times
PDF - 869 times


  • There are currently no refbacks.

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International (CC BY-SA 4.0).