IDENTIFICATION OF ACCOUNTING FRAUD INDICATIONS USING A FINANCIAL RATIO APPROACH AT PT KIMIA FARMA TBK FOR THE 2019 – 2023 PERIOD

Abstract

Accounting fraud is a serious risk that can damage the integrity of financial statements and harm companies. As a state-owned pharmaceutical company, PT Kimia Farma Tbk faces significant challenges related to the potential for fraud in its financial statements. In this context, financial ratios are often used as a tool to analyze company performance and detect indications of financial problems that could trigger fraud. The purpose of this study is to analyze the effect of financial ratios in identifying indications of accounting fraud at PT Indofarma Tbk during 2022-2023. The method used in this study is a quantitative approach with multiple linear regression analysis techniques. The independent variables in this study include profitability ratios (gross profit margin), solvency (interest coverage ratio), and activity (inventory turnover), while the dependent variable is indications of accounting fraud based on the fraud triangle theory (pressure, opportunity, and rationalization). The results of the analysis show that the company's performance fluctuates, reflecting a decline in product efficiency. Overall, although PT Kimia Farma Tbk shows financial improvement, the extreme fluctuation pattern in several ratios can be an early indication of potential fraud or irregularities in financial reporting.