Financial Fraud Detection with GONE Theory

Abstract

Background - The creation of corporate value must be carried out with the participation of all parties with a
strong responsibility. This value creation must be free from fraud that endangers the company. Financial fraud is
an act of fraud that manipulates financial information for a specific purpose. The motivation of fraud perpetrators is
a factor that needs to be further analysed to prevent fraud.
Purpose - The objective of this research is to determine detection of financial fraud with a model developed from
the GONE theory. The GONE theory categorizes fraud contributions into four aspects, namely Greed,
Opportunity, Need, and Exposure.
methodology - Secondary data from the annual reports of publicly listed companies in the technology sector in
Indonesia with a total sampling of 235 companies, analysed by the SEM-PLS method to determine the complexity
of the relationship between a construct and other constructs, as well as the relationship between a construct and
its indicators. The structural model (inner model) and measurement model (outer model) are combined to
construct the model.
Findings - The results show that GONE theory can be used to detect financial statement fraud.
Originality - This study examines financial statement fraud using the GONE theory which is still poorly
researched. This study develops a research model and uses measurements that are different from previous
similar studies.