Jakman

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Vol. 7 No. 4 (2026): September

Articles

Does Board Gender Diversity Weaken the Fraud Pentagon-Driven Financial Statement Fraud? Evidence from Indonesian Manufacturing Firms

N Novia Wijaya N Nicken Destriana B Benardi Benardi
02 September 2026 Vol. 7 No. 4 (2026): September https://doi.org/10.35912/jakman.v7.n4.p209-226.2026
Abstract
02 Sep 2026

Purpose: This study examines whether financial stability, external pressure, ineffective monitoring, and Chief Executive Officer (CEO) tenure raise financial statement fraud risk among Indonesian manufacturing firms and whether board gender diversity moderates these relationships.
Research Methodology: We built a balanced panel of 109 Indonesia Stock Exchange (IDX)-listed manufacturing firms via purposive sampling, yielding 327 firm-year observations (2022-2024). Fraud was measured using the Beneish M-Score and analyzed in Stata/MP 17 via conditional fixed-effects logistic regression, cross-validated against a pooled logistic regression with robust standard errors.
Results: Financial stability positively and significantly predicted fraud under both estimators. External pressure was significant only in the pooled model, and ineffective monitoring and CEO tenure were not significant. Board gender diversity significantly weakened the ineffective monitoring-fraud link in the primary model; however, this and three other moderations did not survive the robustness check.
Conclusions: Governance-moderation effects found under a single estimator may not survive an alternative specification, underscoring the value of testing governance mechanisms with more than one panel estimator.
Limitations: The three-year window restricted within-firm variation, excluding several sampled firms from the primary estimation and limiting the detection of some effects.
Contributions: To our knowledge, this is the first study to test board gender diversity as a moderator of each Fraud Pentagon mechanism–financial stability, external pressure, ineffective monitoring, and CEO tenure–individually rather than as a single average effect. This study offers Indonesian regulators and audit committees guidance for treating board gender diversity as a fraud-mitigating mechanism rather than an assumed safeguard.

Keywords: Board Gender Diversity Financial Statement Fraud Fraud Pentagon Indonesia Manufacturing Firms
How to Cite
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Wijaya, N., Destriana, N., & Benardi, B. (2026). Does Board Gender Diversity Weaken the Fraud Pentagon-Driven Financial Statement Fraud? Evidence from Indonesian Manufacturing Firms. Jurnal Akuntansi, Keuangan, Dan Manajemen, 7(4), 209–226. https://doi.org/10.35912/jakman.v7.n4.p209-226.2026
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