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Abstract

Financial statement fraud remains a serious threat because it causes large losses and is difficult to detect, especially in the pharmaceutical sub-sector, which has a history of financial reporting manipulation. This study aims to analyze the effect of competence on financial statement fraud and to examine whether morality and the audit committee moderate that relationship. This study uses a quantitative approach with secondary data from the financial statements and annual reports of pharmaceutical companies listed on the Indonesia Stock Exchange (IDX) during 2020–2025, selected through purposive sampling, resulting in 66 firm-year observations. Competence is proxied by change in director, morality by the frequency of integrity-related words disclosed in the annual report, the audit committee by the number of committee members, and financial statement fraud by the Beneish M-Score. Data were analyzed using panel data regression and Moderated Regression Analysis (MRA) with EViews 12. The results show that competence has no significant effect on financial statement fraud, morality does not moderate the effect of competence on financial statement fraud, and the audit committee does not moderate the effect of competence on financial statement fraud. These findings indicate that a change in director reflects organizational regeneration rather than an indicator of fraud risk, and that the mere existence of moral disclosure and an audit committee does not guarantee effective control over fraudulent reporting.

Keywords

audit committee, change in director, competence, financial statement fraud, morality

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Diena, A. F., & Susilowati, E. (2026). Does Competence Deter Financial Statement Fraud? The Moderating Role of Morality and Audit Committee Governance. Amkop Management Accounting Review, 6(2), 682–691. https://doi.org/10.37531/amar.v6i2.4186
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