Fraud Diamond Theory Detection on M-Score with Profitability as a Moderating Variable: A Case Study on Sharia Banking Companies

  • Budiandru Swadaya Institute, Jakarta, Indonesia
  • Basyiruddin Nur Swadaya Institute, Jakarta, Indonesia
Keywords: Profitability, Fraud Diamond, M-Score, Moderating Variable, Sharia Banks.


Financial statements provide information about a company's financial health and performance. Fraud involves deceit created for personal or group gain and can occur within financial reports. The Fraud Diamond model serves as a tool for fraud detection, while the M-Score method detects the financial health of a company. This research explores how profitability influences the relationship between fraud diamond variables and M-Score, aiming to prove whether profitability has an impact on the relationship between at least one fraud diamond variable and M-Score. Moderation Regression Analysis, facilitated by Microsoft Excel and SPSS, is employed as the analytical tool. The study utilizes data samples from Bank Mega Syariah, Bank Syariah Bukopin, Bank Syariah Indonesia, Bank Victoria Syariah, Bank Aladin Syariah, and BPD Riau Kepri Syariah for the period 2020-2022. The findings indicate that profitability strengthens the relationship between independent variables and dependent variables. Moreover, the moderating variable interactions significantly moderate 3 out of 5 X variables against Y. This research aims to fill knowledge gaps, provide deeper understanding, and make a significant contribution to the development of financial management theory. It also offers practical guidance for business stakeholders facing complex and dynamic challenges.


Achmad, T., Ghozali, I., & Pamungkas, I. D. (2022). Hexagon fraud: Detection of fraudulent financial reporting in state-owned enterprises Indonesia. Economies, 10(1), 13.

Alwi, Z., Parmitasari, R. D. A., & Syariati, A. (2021). An assessment on Islamic banking ethics through some salient points in the prophetic tradition. Heliyon, 7(5).

Barauskaite, G., & Streimikiene, D. (2021). Corporate social responsibility and financial performance of companies: The puzzle of concepts, definitions and assessment methods. Corporate Social Responsibility and Environmental Management, 28(1), 278-287.

Bunea, O. I., Corbos, R. A., & Popescu, R. I. (2019). Influence of some financial indicators on return on equity ratio in the Romanian energy sector-A competitive approach using a DuPont-based analysis. Energy, 189, 116251.

Cheliatsidou, A., Sariannidis, N., Garefalakis, A., Azibi, J., & Kagias, P. (2023). The international fraud triangle. Journal of Money Laundering Control, 26(1), 106-132.

Endah, N., Tarjo, T., & Musyarofah, S. (2020). The implementation of good corporate governance and efforts to prevent fraud in banking companies. Jurnal Reviu Akuntansi Dan Keuangan, 10(1), 136-149.

Faqir, R. S. (2023). Digital Criminal Investigations in the Era of Artificial Intelligence: A Comprehensive Overview. International Journal of Cyber Criminology, 17(2), 77-94.

Haqq, A. P. N. A., & Budiwitjaksono, G. S. (2019). Fraud pentagon for detecting financial statement fraud. Journal of Economics, Business, and Accountancy Ventura, 22(3), 319-332.

Hashim, H. A., Salleh, Z., Shuhaimi, I., & Ismail, N. A. N. (2020). The risk of financial fraud: a management perspective. Journal of Financial Crime, 27(4), 1143-1159.

Hong, S. J., & Najmi, H. (2020). The relationships between supply chain capability and shareholder value using financial performance indicators. Sustainability, 12(8), 3130.

Irwandi, S. A., Ghozali, I., & Pamungkas, I. D. (2019). Detection fraudulent financial statement: Beneish M-score model. WSEAS Transactions on Business and Economics, 16(1), 271-281.

Mandal, A. (2023). Fathoming fraud: unveiling theories, investigating pathways and combating fraud. Journal of Financial Crime.

Mendes de Oliveira, D. K., Imoniana, J. O., Slomski, V., Reginato, L., & Slomski, V. G. (2022). How do internal control environments connect to sustainable development to curb fraud in Brazil?. Sustainability, 14(9), 5593.

Napitupulu, I. H. (2023). Internal control, manager’s competency, management accounting information systems and good corporate governance: Evidence from rural banks in Indonesia. Global Business Review, 24(3), 563-585.

Nikmah, U., & Fajarini, I. (2020). The effect of financial performance on profit growth moderated by CSR disclosure. Accounting Analysis Journal, 9(3), 179-185.

Nursifitri, N., Rahayu, S., & Yudi, Y. (2023). The Influence of Religiosity, Organizational Culture, Implementation of Internal Controls and Information Asymmetry on Accounting Fraud. Journal of Business Management and Economic Development, 1(01), 70-88.

Owusu, G. M. Y., Koomson, T. A. A., Alipoe, S. A., & Kani, Y. A. (2022). Examining the predictors of fraud in state-owned enterprises: an application of the fraud triangle theory. Journal of Money Laundering Control, 25(2), 427-444.

Salin, A. S. A. P., Manan, S. K. A., & Kamaluddin, N. (2020). Ethical framework for directors–learning from the prophet. International Journal of Law and Management, 62(2), 171-191.

Shepherd, D., & Button, M. (2019). Organizational inhibitions to addressing occupational fraud: A theory of differential rationalization. Deviant Behavior, 40(8), 971-991.

Vousinas, G. L. (2019). Advancing theory of fraud: the SCORE model. Journal of Financial Crime, 26(1), 372-381.

Wahyudi, S., Achmad, T., & Pamungkas, I. D. (2022). Prevention Village Fund Fraud in Indonesia: Moral Sensitivity as a Moderating Variable. Economies, 10(1), 26.

Wahyuni-TD, I. S., Haron, H., & Fernando, Y. (2021). The effects of good governance and fraud prevention on performance of the zakat institutions in Indonesia: A Sharīʿah forensic accounting perspective. International Journal of Islamic and Middle Eastern Finance and Management, 14(4), 692-712.

Wicaksono, A., & Suryandari, D. (2021). The Analysis of Fraudulent Financial Reports Through Fraud Hexagon on Public Mining Companies. Accounting Analysis Journal, 10(3), 220-228.

Zhu, L., Li, M., & Metawa, N. (2021). Financial risk evaluation Z-score model for intelligent IoT-based enterprises. Information Processing & Management, 58(6), 102692.

How to Cite
Budiandru, & Nur, B. (2024). Fraud Diamond Theory Detection on M-Score with Profitability as a Moderating Variable: A Case Study on Sharia Banking Companies. International Journal of Science and Society, 6(1), 302-313.