FRAUD INVESTIGATION ON FINANCIAL STATEMENT FRAUD FACTORS AND COMPARISON OF FRAUD TRIANGLE AND FRAUD ELEMENTS TRIANGLE ANALYSIS A THESIS Presented as Partial Fulfillment of the Requirement to Obtain the Bachelor Degree in Accounting Department Written by: Raden Anca Jagra Ardana Student Number: 14312415 DEPARTMENT OF ACCOUNTING INTERNATIONAL PROGRAM FACULTY OF ECONOMICS UNIVERSITAS ISLAM INDONESIA YOGYAKARTA 2018 i FRAUD INVESTIGATION ON FINANCIAL STATEMENT FRAUD FACTORS AND WITH COMPARISON OF FRAUD TRIANGLE AND FRAUD ELEMENTS TRIANGLE ANALYSIS A THESIS Presented as Partial Fulfillment of the Requirement to Obtain the Bachelor Degree in Accounting Department Written by: Raden Anca Jagra Ardana Student Number: 14312415 DEPARTMENT OF ACCOUNTING INTERNATIONAL PROGRAM FACULTY OF ECONOMICS UNIVERSITAS ISLAM INDONESIA YOGYAKARTA 2018 ii iii iv v ACKNOWLEDGEMENT Assalamu’alaikum Warrahmatullahi Wabarakaatuh. All the high praise to the Creator of All-Being. Allah SWT. I testify that there is no god but Allah and Muhammad is the messenger of Allah. For all the strength and the willpower given to the researcher that gave the researcher the opportunity to finish a thesis entitled “Fraud Investigation on Financial Satatement Fraud Factors and With Comparsion of Fraud Triangle and Fraud Element Triangle Analysis”. This study is a partial requirement to acquire the bachelor degree in Accounting Department from International Program of Islamic University of Indonesia. As the researcher in this study, i acknowledged that this study is still far away from perfect. However, I have given all my time, energy, and spirit to be able to complete this study as perfectly as possible. The author also realized that this study won’t be able to be finished without supports and guidances from several parties that had helped me morally and spiritually. Therefore, the researcher would like to address my best appreciations and regards to: 1. Allah SWT. Alhamdulillahi Rabbil’Alamin. Thank you for all the grace, guidances, and blessings that has been given to me. I personally hope that my good intentions can be addressed to the right parties in orde to give furhter benefits. 2. Muhhamad SAW. The role model of all mankind, the number 1 influencer in the world. Best regards and salutations from me upon you. vi 3. All of the Hariono family members. Nunung Iriani Handayani, as my mother, who had supported me through countless kindness even in hardship situations. Raden Edy Hariono Mintardjo, as my father, that have supported me through monetary and countless life experiences. I would like to thank you for all the countless support you two gave me. I pledged that i will return all your favors even though i knew i wouldn’t able to fulfill it. Rona Aulia Tareza Utami and Reva Arma Jala Antariksa, as my little sister and my little brother, who also had supported me in various ways possible. 4. Fathul Wahid, S.T., M.Sc., Ph.D. as the rector and Dwipraptono Agus Harjito, Dr., Drs., M.Si. as the dean of the Faculty of Economics Islamic University of Indonesia. 5. Jaka Sriyana Dr., S.E., M.Si. as the Dean of the Faculty of Economics, Universitas Islam Indonesia. 6. Mahmudi S.E., M.Si. as Head of Accounting Program, Faculty of Economics, Universitas Islam Indonesia. 7. Ayu Chairina Laksmi S.E., MAC., M.Res., Ak., PI as the Secretary of Accounting, International Program, Faculty of Economics, Universitas Islam Indonesia 8. Hendi Yogi Prabowo SE., M.For.Accy., Ph.D. as my thesis advisors who always guide me. 9. Mr Willy Prasetya, S.Pd., M.A. as my language advisor, thank you for your guidance, understanding, and simplicity so the thesis could be finished. vii 10. All lecturers and staffs of Islamic University of Indonesia who had packed me with knowledge both in theoritical and islamic values. 11. Banatidika Ikrarida Dzakkiyah. Thank you for all the spiritual, emotional, and countless supports. Also all lessons and things we’ve been through this 7 years. I wish you a wishing well for the future. Fly away my graceful bird! 12. GENE_Family members. Ghifari Wibi Eghanisa, Fachrullah, Iqro Asmi Muttaqien, Krisnawan Mustaqim Saputra, Hilman Luthfan Nahari, Muhammad Djordy Djati, Patria Dani Wijaya, and Faris Asyrof al Fatih. Thanks for all the laughs mate!. GENE_Family milik kita bersama. 13. My close friends whom i always share my stories with. Ghifari W.E., Karima Syahidah, Aisya Dewi F., Dyah Aniza, Rani Ayu K.D., Luky Fitri, Asia M., Zahra Amelia H, and Patricia Anggitani. Thanks for all memories and the fuss i shared! We both learn together. 14. CHIPS. Alifia, Rafika, Vina, Angga, Renov. Thanks for being the best konco hura-hura also konco haru-haru!. 15. Gadjah Mada Airsoft Squad. Thank you for all the tactical and life lessons that you all gave me! Keep the family “fun and Brotherhood”. MVP is for the one recruited me: Yoshua Krista / Rubah Binal. And the current supreme leader of GAS, Fadly F.W. 16. Tukang Santet FC. Thank you for trusting me as the GK. Gala, Patria besar, Patria kecil, Aqil, Alm. Nawal, Krisna, Danie, Afif, Raja, Abang, and Udik. And yet we still didn’t win any trophy. However, we won the fun!. viii 17. Hendi Squad. Muli, Asia, Desi, Ojan, Shafira, and many others. Let this struggles made our brotherhood stronger!. 18. Forum Dzikir, Magang HMJA 2014/2015, Poland AIESECers, and all the organizational events I had enrolled in. Thanks for all the valuable lessons!. 19. And all other parties that cannot be mentioned one by one. Thank you for all the support given!. May Allah SWT’s blessings and gratitude be upon you for all parties that supported the author all this way. Wassalamualaikum Warohmatullahi Wabarakatuuh. Yogyakarta, November 15th, 2018 Raden Anca jagra Ardana ix Table of Content COVER PAGE ..................................................................................................... i TITLE PAGE ...................................................................................................... ii LEGALIZATION PAGE ................................... Error! Bookmark not defined. APPROVAL PAGE ........................................... Error! Bookmark not defined. DECLARATION OF AUTHETICITY .............. Error! Bookmark not defined. ACKNOWLEDGEMENT .................................................................................. vi ABSTRACT ...................................................................................................... xv ABSTRAK ....................................................................................................... xvi CHAPTER 1 ........................................................................................................ 1 1.1 Background of Study ........................................................................................ 1 1.2 Problem Identification ...................................................................................... 7 1.3 Problem Formulation ........................................................................................ 8 1.4. Research Objectives ......................................................................................... 9 1.5. Research Contribution .................................................................................... 10 1.6. Systematic of Writing ..................................................................................... 11 CHAPTER II ..................................................................................................... 13 2.1. Chapter Introduction ....................................................................................... 13 2.2. Theoretical Review ......................................................................................... 13 2.3. Previous Research ........................................................................................... 27 CHAPTER III .................................................................................................... 30 3.1. Introduction...................................................................................................... 30 3.2. Type of Research ............................................................................................ 30 3.3. Research Process ............................................................................................. 31 3.4 Research Data Sources and Data Collection Method ................................ 34 3.5. Data Analysis Technique ............................................................................... 36 CHAPTER IV .................................................................................................... 44 4.1 Chapter Introduction ....................................................................................... 44 4.2 Profile and Case Overview of Research Object .......................................... 44 x 4.3 Olympus Financial Statement Fraud Case Analysis with Fraud Triangle and Satyam Financial Statement Fraud Case Analysis with Fraud Triangle ............................................................................................................ 52 4.4. Olympus Financial Statement Fraud Case Analysis with Fraud Element Triangle and Satyam Financial Statement Fraud Case Analysis with Fraud Element Triangle. ................................................................................ 92 4.5. Differences Between Olympus Corporation and Satyam Computers 127 with Fraud Element Triangle .............................................................................. 127 4.7. Satyam Financial Statement Fraud Case Analysis Fraud Investigation......