Fraudulent financial reporting throughthe view of fraud pentagontheory

Accounting-based financial scandals caused by fraudulent financial reports negatively affect the financial markets and cause loss of confidence in investors. Financial reporting quality needs to be improved in order to build and maintain trust in financial markets. To increase the quality of financial reports, fraudulent financial reporting risks should be defined. Accordingly, this study has been conducted using the pentagonal view of fraud to investigate whether pressure, opportunity, rationalization, capability and arrogance affect fraudulent financial reporting.This study used the information of 127 companies admitted to the Tehran Stock Exchange from 2015 to 2020.The results of data analysis using the logistic regression method showed that the pressure from gross profit margin, sales growth and debt ratio affect fraudulent financial reporting.Also, the results confirmed the impact of the opportunity due to efficient supervision (independence of the board of directors) as well as the rationalization due to the auditor's statement on fraudulent financial reporting.However, capability and arrogance have not been able to predict fraudulent financial reporting.