OWNERSHIP STRUCTURE AND THE PROBABILITY OF FINANCIAL REPORTING FRAUD

Abstract

This study aims to determine the influence of ownership structure, namely managerial ownership, institutional ownership, foreign ownership, family ownership, and public ownership on the probability of financial reporting fraud. This research is a quantitative study with a sample of 353 manufacturing companies listed in Indonesia Stock Exchange (IDX) during the period of 2013 until 2017. The sampling technique was purposive sampling, while the data collection method used data from the company’s financial report taken from Indonesia Capital Market Directory or the company’s official website. The result of this study indicated that managerial ownership, institutional ownership, and foreign ownership have a negative and significant effect on the probability of financial reporting fraud. On the other hand, family ownership and public ownership have no effect to the probability of financial reporting fraud.