Fraud Pentagon Theory for Detecting Financial Statement Fraudulent at Companies Listed on Vietnam's Stock Market

Abstract

Using the fraudulent pentagon theory of Crowe (2011), this study aims to assess the factors affecting financial statement fraud, namely: (i) pressure may change due to financial stability, (ii) opportunity due to changes in auditors, (iii) rationalization due to auditors' opinions, (iv) capability to be promoted by the duality of CEO and chairman of the board and (v) arrogance by the number of CEOs in the last 3 years. The data used in the study are 88 fraudulent and
non-fraudulent companies listed on HOSE 2019. The data is analyzed using Binary logistic regression. Research results show that pressure and rationalization influence financial reporting fraud, while opportunity, capability and arrogance do not.