International Journal of Economic Perspectives, 2016, Volume 10, Issue 1,

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1 Dividend Policy, Information Technology, Accounting Reporting to Investor Reaction And Fraud Prevention Tulus SURYANTO Lecturer Faculty of Islamic Economic and Business; The State Islamic Institute of Raden Intan Lampung- Indonesia; ABSTRACT The purpose of this research is to examine the impact of dividend policy, information technology, accounting reporting toward fraud prevention in companies that listed on Indonesia Stock Exchange. Besides, this research aims to examine if investor reaction behaves as moderator. The population of the study is composed of manufacturing companies registered in the Indonesia Stock Exchange. Sampling technique employed in this study is the cluster random sampling with a total sample of 73 companies. The data analysis has been done in SPSS. The results of the study show that the dividend policy, information technology, and accounting reporting have significant influence on fraud prevention. The other results showed that investor reaction behaves as moderator among dividend policy, accounting reporting to fraud prevention; however, investor reaction does not have a moderation role betwwen information technology and fraud prevention. JEL Classifications: M10; M14. Keywords: Dividend Policy; Information Technology; Accounting Reporting; Reaction. Fraud Prevention; Investor 1. INTRODUCTION In the process of making investment decisions, investors tend to invest in companies with a concern for social issues and the environment (Pinnarwan in Zuhroh and Sukmawati, 2003). The companies that are more revealing social information needed by investors will certainly gain the trust of the public. With increasing public trust in a company that does the disclosure is expected to be the driver of the increase in the volume of stock trading and stock returns in companies that are considered as the driving force for the reaction of investors in making investment decisions. To attract investors to invest in, the companies have to work hard so that they are presenting the report free of misstatements and irregularities or fraud. According to SAS no. 99, there are four types of pressure that may lead to fraud in the financial statements: (1) financial stability, (2) external pressure, (3) personal financial need, and (4) financial targets. Financial statement fraud often begins with misstatements or management-quarter earnings from financial statements that are considered not material but eventually grew into massive fraud and produce annual financial statements materially misleading (Rezaee, 2002). Cheating on the financial statements will result in misperceptions by auditors and other users of financial statements because it does not show the actual condition of the company. This will bring the impact of losses for businesses. One way you can do the management company to prevent fraud is to focus on dividend policy. A company's dividend policy has important implications for many parties involved in the community, because the dividend policy is a decision whether the profits they make the company will be distributed to shareholders as dividends or be detained in the form of retained earnings in order to finance an investment in the future (Agus, 2001 ) dividend policy is an indicator of earnings quality companies, with the dividend policy will be an impact on corporate profits in the financial statements. Their dividend policy taken by the management company to manage their finances in particular, will help reduce the occurrence of fraud in earnings manipulation. Information technology launched to assist companies in carrying out day-to-day operations. Implementation of information technology in the company making the performance increase. With systematic information technology and will further narrow the gap integrated fraud within the company. In addition to information technology, another factor that is not less important in the prevention of fraud is accounting reporting. Accounting reporting is an essential component to create organizational accountability. Greater demands on the implementation of public accountability implications for management to provide information to the public, one 138

2 of which is the accounting information in the form of financial statements. The challenge facing accounting reporting is mampukah accounting provide information that can be used to monitor the management accountability, political accountability, and accountability policies. One form of fraud prevention is to present a true accounting reporting by considering the implementation of policies, systems and procedures to help assure that necessary action has been carried commissioners, as well as manajernen and other personnel to be able to provide the assurance of adequate. This study tries to examine the effect of the dividend policy, the application of information technology, accounting and reporting for fraud prevention investigate whether the reaction of investors as a moderating influence variable dividend policy, the application of information technology accounting reporting on fraud prevention. 2. LITERATURE REVIEW 2.1 Dividend policy Dividend is the value of the company's net income after deducting tax earnings (retained earnings) is being held as a reserve company. According Mamduh (2004), the dividend is the compensation received by the shareholders, in addition to capital gains. Investors will be happy if part of net profit will be distributed as dividend increases. Thus the dividend decision will refer to an optimal dividend policy, especially adapted to the concept of the objective of maximizing the value of the company. Dividend policy (DPS) regarding the decision to split the profit or hold it to be invested into the company. If the company has a policy to distribute additional cash dividend, then it is likely to increase compared with the number of shares outstanding. The company assortment, Patience (2004) mentions, among others, namely: 1. A stable dividend policy, in this case the amount of dividends paid per share each year are relatively stable over a certain period. 2. The dividend policy with the establishment of minimum dividends on a regular basis plus certain extras. In this case the shareholders receive dividends on a regular basis with a minimal amount of dollars alone. 3. The dividend policy with a fixed percentage amount (dividend payout ratio), means dividends paid to shareholders in proportion fluctuates with the fluctuation rate of profit. 4. The residual dividend policy, in this policy the company prefers the use of profit for investment opportunities that the new dividend will be paid if the income exceeds the available funding needs for optimal investment Information Technology Information technology has become the primary choice in creating an organization's information systems are resilient and able to bring a competitive advantage in the increasingly fierce competition ini.investasi adults in information technology within an organization generally intended to contribute to the performance of individual members of organizations and institutions. In addition, the use of information technology will also facilitate and accelerate the activities of the organization. Thus, the employees can perform their duties economically, efficiently and effectively. According to O'Brien (2006) technology is a computer network consisting of a wide range of information processing components that use different types of hardware, software, data management and information network technology. According to Aji (2005) information is processed and its data into other useful data and information commonly called. Utilization of information technology also gives a lot for nongovernmental institutions. Mahmood and Mann (1993) states that the steady investment in information technology should be considered to improve the economic performance and strategy of the organization. By investing in the right IT company will, have a competitive advantage that will be able to compete within the company and success in the competition will be able to improve the performance of the company in the form of the firm's output, efficiency, efektivitivitas, strengths and weaknesses of the company, and the value of the company as indicated by the value stock company. Utilization of information technology, according to Thomson et al. (1991) in Tjhai (2003) are the benefits expected by users of information systems in performing their duties or behavior in the use of technology at the time of doing the job. The measurement is based on the intensity of use, frequency of use, and the number of applications or software used. Appropriate use of information technology and backed by the expertise of personnel who operate it can improve the performance of the company and the performance of the individual concerned. The role of IT in various aspects of business activities can be understood because as a technology that focuses on setting up information systems with the use of computers, IT can meet the information needs of the business world very quickly, timely, relevant, and accurate (Wilkinson and Cerullo, 1997). 139

3 2.3 Accounting Reporting The financial statements is a form of accountability for the stewardship of economic resources owned by an entity (Deddi Nordiawan, 2007). As revealed also by Kieso, Weygant (2005) that, report that measures the success of enterprise operations for a given period of time. Meanwhile, according to Government Regulation No. 24 of 2005, Financial Statement is structured reports regarding the financial position and transactions undertaken by a reporting entity. Financial statement presentation purposes, according to Jones (2000) is "To provide (1) financial information usefull for making economic and (2) information usefull for evaluating managerial and organizational performance". While Wolk (2001) states that: "An objective of financial statements for govermental and not-for-profit Organizations is to provide information useful for evaluating the effectiveness of the management of resources in Achieving the organization's goals. In SFAS No. 45 "Nonprofit Financial Reporting" suggests the main objective of financial statements is to provide the relevant information to meet the interests of the contributors, the organization's members, creditors and other parties that provide resources for the activities of non-profit organizations. 2.4 Fraud In the English-Indonesian dictionary (Echols, 1989), fraud means (1) fraud, (2) an Impostor, (3) cheating, (4) embezzlement. Jones and Bates (Jones, 1990) in the Public Sector Auditing claimed fraud in thef Act 1968 is darkening that includes a variety of fraud, among other intentional fraud, falsification of accounts, evil practices, embezzlement or theft, corruption and so on. Fraud occurs where a person obtains property or financial gain through fraud or deception. Such cheating indicate the intentional, excluding ignorance. Meanwhile, according to Jones (Jones, 1993), fraud is an intentional errors, which are grouped into two types, namely: (1) fraudulent financial reporting, which include: manipulation, falsification, or alteration of accounting records or supporting documents and financial statements prepared, not present in or deliberately omit events, transactions, and important information and financial statements, and intentionally apply the incorrect accounting principles, (2) missapropriation of assets, which include cash receipts embezzlement, theft of assets, and the things that cause an entity to pay for goods or services not received. 2.5 Investor reaction Investors are individuals, groups or legal entities investing in a specific business unit. The reaction of investors indicated by a particular company's stock price changes are quite striking from a securities concerned at the time of the earnings announcement. Which is striking is that there is a considerable difference between the returns that occur (the actual return) with the return expectations of expected return. Investor reaction (the market) is indicated by a change in the stock price (stock return) striking a particular company at the time of the earnings announcement that there are considerable differences between the returns that occur with return expectations (Suwardjono, 2005). 2.6 Hypothesis Development Dividend policy effect on fraud prevention Dividend policy is an indicator of earnings quality companies, with the dividend policy will be an impact on corporate profits in the financial statements. Their dividend policy taken by the management company to manage their finances in particular, will help reduce the occurrence of fraud in earnings manipulation. Casey and Hanlon (2005), using a sample of 32 companies that ituduh commit fraud by the SEC's financial reporting, test correlation dividends and earnings quality. They found that companies that commit fraud are rarely (not) pay dividends and raise the size of the dividend compared to companies who do not commit fraud. Easterbrook (1984) states that the company is manipulating its earnings are likely to share or raise dividends more frequently than companies that are not involved in the manipulation of earnings. Profits from earnings manipulation does not have a cash basis and not sustainable. Therefore, managers tend not to share or not to raise the dividend even though no increase in profit, because profit is thus unsustainable (Lintner, 1956). Glassman (2005) states that the payment of the dividend would cause the company to report earnings engineered cenderungtidak that does not produce actual cash flows for dividend payments. Based on the above explanation, the proposed hypothesis is as follows: 140

4 H1: Dividend policy exerts effects on fraud prevention Information technology influence on fraud prevention Information technology has brought fundamental changes to the organization, both private and public organizations. Therefore, information technology becomes a very important thing in determining the competitiveness and the ability of companies to improve business performance in the future. Information technology resources into a consideration both for managers and consultants, in determining the success of the company in the future (Devaraj and Kohli, 2003).Implementasi information technology can meet the information needs of the business world very quickly, timely, relevant, and accurate (Wilkinson and Cerullo, 1997). Their implementation of information technology that helps enterprise IT activity in generating accurate information would greatly help prevent fraud in the organization of the company. Under these conditions, put forward the hypothesis as follows: H2: Information Technology exerts influence on fraud prevention Reporting Accounting effect on fraud prevention Accounting reporting is an essential component to create organizational accountability. One form pencegahah accounting fraud is to present the actual reporting by considering the implementation of policies, systems and procedures to help assure that necessary action has been carried commissioners, as well as manajernen and other personnel to be able to provide the assurance of adequate. Research conducted by Santoso (2008) proved that the application of the accounting report in the public sector proved to prevent fraud. Based on the above explanation, the proposed hypothesis is as follows: H3: Accounting reporting effect on fraud prevention Investor reaction moderates the influence of dividend policy, the application of information technology and accounting reporting on fraud prevention. Their maximum effort on the part of companies to prevent fraud would bring positive effects in the eyes of investors. Attempts by the company such as the application of dividend policy, information technology applications and presenting accounting reporting is expected to attract investors to invest in the company. Investors can look at the performance of the company based on information from the financial statements presented by the company. Of these financial statements the company implied that the work done day-to-day operations they are free from elements of fraud. Policy set by the company, recording techniques were done can be seen from the information presented by the company through its financial statements. Research conducted by Wibowo et al (2009) showed that the application of the fraud warning system by the method of whistle blowing system provides benefits for the organization as a container for information about internal party companies to disclose, report the fraud that occurred. Firms that have been doing early prevention of fraud positive reactions in the eyes of investors. Investors assess that the company has implemented fraud yange warning system in their organization, suggesting that the company has sought the maximum in managing the organization to improve organizational performance (Reinsten, Husband, Bayau 1999) in Wibowo (2009). Based on the above explanation, the proposed hypothesis is as follows: H4: The reaction of investors to moderate the influence of dividend policy on fraud prevention H5: The reaction of investors to moderate the influence of information technology applications to the prevention of fraud H6: The reaction of investors to moderate the effect of accounting reporting on fraud prevention. 3. METHODS 3.1 Population and Sample The population in this study are all companies listed or listing on the Indonesian Stock Exchange (BEI) during

5 Figure 1. Model Research Framework Research Model Investor - Dividend Policy -Application T I fraud prevention 3.2 Sampling techniques The sample in this study were selected by random cluster sampling method, the sample was obtained from each cluster were chosen at random (have now, 2006). 3.3 Testing for Data Quality and Results According to Hair et al (1995) the quality of the data produced from the use of the instrument can be evaluated through tests of reliability and validity. The test each one to determine the consistency and accuracy of data collected from the use of the instrument. There are two procedures were performed to measure the reliability and validity of data, namely: internal consistency test of the respondents on research instruments and test construct validity by way of correlating between the scores of each item and the total score. Description of the test quality of the data is as follows: 1. Test the internal consistency (reliability) was determined by Cronbach alpha coefficient. A construct or instrument said to be reliable if it gives Cronbach alpha values above 0.60 (Nunnally, 1967 in Imam, 2005). 2. Test homogeneity of data (validity) with a correlation test person. If the result is significant then the data is said to be valid Normality Test Normality test aims to test whether the regression model, or residual confounding variables have a normal distribution. As it is known that the t test and F assumes that the value of the residuals follow a normal distribution. If this assumption is violated then becomes invalid statistical test for small sample size. One statistical test that can be used to test the residual normality is a non-parametric statistical tests Kolmogorov- Smirnov (KS) Tests of Classical Assumptions In connection with the use of multiple regression analysis (multiple regression) it is necessary to test classic assumptions contained in the multiple regression as follows: Test for Multicoloniarity Multicoloniarity test aims to test whether there is a correlation between the independent variables in the regression model (Priest, 2002). This test can see the amount of VIF and tolerance. Guidelines used for a regression model that is free multicoloniarity is VIF all independent variables under the value of 10 and a tolerance value above 0.1 (Hair, 1998) Test for Autocorrelation The aim of autocorrelation test is to test whether the linear regression model there is a correlation between bullies error in period t with an error in period t-1 (previous) (Priest, 2002). This test is done by looking at the Durbin Watson: 1) if d <dl or d> (4-dL) then there is autocorrelation. 142

6 2) if d lies between du and (4-dU) then there is no autocorrelation. 3) if d lies between dl and du or between (4-dU) and (4-dL) it does not produce definitive conclusions Test for Heteroskedasticity Heteroskedasticity test was conducted to test whether the regression model occurred inequality variant of the residuals of the observations to other observations. If a variant of another observation residual remains, then called homoscedasticity. A good regression model was homoscedasticity or not happen heterokedasticity (Priest, 2002). Detection of the presence or absence heterokedastisitas done by looking at the presence or absence of a particular pattern (wavy, widened and then narrowed) on the graph plots (scatterplot) between the predictive value of the variables associated with the residual. 3.4 Hypothesis Testing The statistical analysis used was simple and multiple regression analysis as a model that predicts the causal relationship between the dependent variable with several independent variables. Simple linear regression to examine the relationship between dividend policy, the application of information technology, accounting reporting to the prevention of fraud and examine the relationship moderating variable (investor reaction) with fraud prevention. Moderated regression analysis (MRA) is used to determine the interaction between the three variables by one variable as moderating variable (Nunnally, 1994). 4. RESULTS AND DISCUSSION 4.1 Variable Description An overview of research variables are dividend policy, information technology, accounting reports, fraud and investor reactions are presented in the table of descriptive statistics which show the range of theoretical and actual figures, the average standard deviation can be seen in Table 1. If the average value in the range of answers to each construct actually below average in the range of theoretical, it means that the influence of the variables studied the respondents tend to be low. And vice versa if the average value of the range actually above average theoretical range, then the effect of the studied variables on respondents tend to be high. Table 1: Descriptive statistics Variable Research Descriptive Statistics N Minimum Maximum Mean Std. Deviation Statistic Statistic Statistic Statistic Std. Error Statistic KB TI 73 12, AC FR RI Valid N (listwise) 73 Based on the above table it can be seen that the dividend policy (KB) has a minimum value of , the maximum value of 20.00, an average of , and the standard deviation of 1, 256. The standard deviation value which is smaller than the dividend policy of the average value indicates that the value of the dividend policy between the respective companies are not too far away. Variable information technology (TI) has a minimum value , maximum value, the average value of the standard deviation of and Standard deviation value which is smaller than the average value indicates the difference between the use of information technology companies are small. Positive values indicate that mean that the average company surveyed using information technology in its operations. Accounting reporting variable (AC) has a minimum value of 11,445, the maximum value of , an average value of $ 18,890, and the standard deviation of Standard deviation value which is smaller than the average value indicates the difference between the accounting reporting companies is small. Positive values 143

7 indicate that mean that the average company surveyed Accouting activity report. Variable fraud (FR) has a minimum value of , maximum value, the average value of the standard deviation of and Standard deviation value which is smaller than the average value indicates differences in the amount of inter-company fraud prevention is small. Variable investor reaction (RI) has a minimum value 11, 256, the maximum value of 20, 891, the average value of 16,213, and a standard deviation of 12, 232. Values smaller standard deviation from the average value indicates the difference between the companies is investor reactions little would mean there was no difference in reaction i invetor too much for each company. 4.2 Test for Data Quality Results of testing the reliability and validity of the data show the level of consistency and accuracy is quite good. On test reliability, internal consistency coefficient Cronbach's Alpha coefficients showed no less than the minimum limit of 0.60 (Nunnally, 1967 in Imam, 2005). While on testing the validity of the homogeneity test data and test correlation between the scores of each item with the total score (Pearson Correlation) showed a positive correlation and significant level at 0.01 level. Reliability and validity of test results are presented in Table 2 and Table 3 below. Table 2: Reliability Test Results Cronbach No Variable Alpha Value Information 1 Dividend Policy 0,674 Reliable 2 Application information teknlogi 0,683 Reliable 3 Accounting Reporting 0,637 Reliable 4 prevention of fraud 0,807 Reliable 5 investor reaction 0,761 Reliable Source: primary data processed. Table 3: Validity of Test Results Range No Correlations Significant Information 1 Variable 0,336**-0,689** 0,001 Valid 2 Dividend Policy 0,391**-0,781** 0,001 Valid 3 Application information teknlogi 0,260**-0,820** 0,001 Valid 4 Accounting Reporting 0,387**-0,808** 0,001 Valid 5 prevention of fraud 0,221**-0,708** 0,001 Valid Source: primary data processed 4.3 Normality Test Here's a test to see if the data has normality of results using the program SPSS: 144

8 Table 4: Normality Test Results One-Sample Kolmogorov-Smirnov Test N 73 Unstandardized Residual Normal Parameters a,,b Mean Std. Deviation Most Extreme Differences Absolute.234 Positive.023 Negative Kolmogorov-Smirnov Z.552 Asymp. Sig. (2-tailed).578 a. Test distribution is Normal. b. Calculated from data. Based on the above output hasi, otherwise variable spread with normal test results Kolmogorov Smirnov standarized residuals indicate if the value assympatic significant (two-tailed)> alpha (0.05). In Table, it is known that the Kolmogorov-Smirnov test sebesar0,552 while asymp value. sig. (2-tailed) for unstandardized variable of greater than a value of 0.05, so it can be concluded that the data used in normal distribution. 4.4 Tests of Classical Assumptions Test for Multicollinearity Model 1 (Constant) KB TI AR RI a. Dependent Variable: FR Tolerance value calculation results also showed no independent variable has a value of Tolerance is less than 0.10, which means there is no correlation between the independent variable whose value is> 95%. Results of calculation Variance Inflation Factor (VIF) also showed the same thing that no one independent variable which has a value of VIF> 10. so it can be said that there is no multicoloniarity between independent variables in the regression model Test for Autocorrelation Based on the calculation results show that the value of Durbin Watson (DW) of 1.827, this value is compared to the value of the table using the value of significance of 5%, the number of samples 100 (the number of samples 120 for less than 125 is closer to 100) and the number of independent variables 4 (k = 4) the obtained value of dl and du at So we can say that DW greater than the upper limit (du) 1,758 and less than 4 to (4- du), so it can be interpreted that there is no positive or negative autocorrelation Test for Heteroscedasticity Coefficient a s Unstandardized Coefficients Standardized Coefficients Collinearity Statistics B Std. Error Beta t Sig. Tolerance VIF Based on the calculation results indicate that the coefficient for the independent variable parameter no significant, it means that there is no heteroscedasticity in the regression model 145

9 Model 1 Model Summary b Adjusted Std. Error of Durbin- R R Square R Square the Estimate Watson.751 a a. Predictors: (Constant), KB,TI,AR,FR b. Dependent Variable: FR Model 1 (Constant) KB TI AR RI a. Dependent Variable: LNDRTRES 4.5 Hypothesis Testing Coefficients a Unstandardized Standardized Coefficients Coefficients B Std. Error Beta t Sig Here's the view of the results of hypothesis testing in Tables 6 and 7: Table 6: Summary of Results of Testing Hypotheses Adjusted Significance test Significance test simultaneous parameter Hypothesis R Square individual Information F Sig t Sig H1 KB FR 0, ,968 0,000 take effect H2 take effect TI FR 0, ,332 0,000 H3 AR FR 0, ,960 0,000 take effect H4 KB,RI, MDKBRI FR 0,558 51,012 0,000 take effect KB 0,735 0,023 take effect RI - 1,206 0,001 take effect MDKBRI 1, take effect H5 TI,RI,MDTIRI-FR 0,552 49,869 0,000 take effect TI 4,782 0,000 take effect RI 0,896 0,372 no Effect MDTIRI -0,908 0,366 no Effect H6 AR,RI, MDKBRI FR 0,558 51,012 0,000 take effect AR 0,735 0,064 take effect RI - 1,206 0,030 take effect MDARRI 1,116 0,017 take effect 146

10 Table 7: Hypothesis Testing Results Hypothesis Informatio n H1 Dividend policy effect on fraud prevention Accepted H2 Application of information technology influence on fraud prevention Accepted H3 Accounting reporting effect on fraud policy Accepted H4 Investor reaction to moderate the application of technology to the prevention of fraud Accepted H5 Investor reaction to moderate the influence of dividend policy on fraud prevention Rejected H6 Investor reaction to moderate the effect of accounting reporting on fraud prevention Accepted Source: primary data processed 4.6 Discussion Dividend Policy effect on fraud prevention Dividend policy is an indicator of earnings quality companies, with the dividend policy will be an impact on corporate profits in the financial statements. Their dividend policy taken by the management company to manage their finances in particular, will help reduces the occurrence of fraud in earnings manipulation. This study supports the research conducted by Casey and Hanlon (2005) who found that companies that commit fraud are rarely (not) pay dividends and raise the size of the dividend compared to companies who do not commit fraud Information technology influence on fraud prevention These results indicate that the implementation of information technology that helps enterprise IT activity in generating accurate information impacting greatly help prevent fraud (fraud) within enterprise organizations. The results are consistent with the proposed statement olehwilkinson and Cerullo (1997) who said that the implementation of information technology to meet the information needs of the business world very quickly, timely, relevant, and accurate so as to minimize errors whether intentional or not Accounting Reporting influence on fraud prevention Accounting reporting is an essential component to create organizational accountability. One form of fraud prevention is to present a true accounting reporting by considering the implementation of policies, systems and procedures to help assure that necessary action has been carried commissioners, as well as manajernen and other personnel to be able to provide the assurance of adequate. The results support the research conducted by Santoso (2008), which proved that the application of the accounting report in the public sector proved to prevent fraud Investor reaction to moderate the influence of dividend policy on fraud prevention From the test results analysis moderated known that investor reaction proved to moderate the influence of diveden policy towards fraud prevention. Their dividend policy applied by the company in preventing fraud directly and indirectly affected investor reaction. Dividend policy taken by the company as a form of prevention of fraud is considered capable of triggering the reaction of investors to decide the making of investments and an assessment of the company. Results of this study indirectly supports the research carried out by Hidayatullah et al (2012), where the research proves that the ROA, the policy is the trigger divedendan stock returns directly to the reaction of investors. 147

11 Investors reaction are not proven moderate the influence of information technology on fraud prevention. For hypothesis to 5 who say that the reaction of investors to moderate the effect of information technology on the prevention of fraud is not proven. This result is due to the reality on the ground, investors are more likely to pay attention to the performance of the company as a whole from the published financial statements and did not examine the technology used in the company's financial reporting process their produce Investor reaction proved to moderate the effect of accounting reporting on fraud prevention Hypothesis to 6 which says that the reaction of investors to moderate influence on the prevention of fraud accounting reporting is received. Accounting reporting is the dominant variable is considered investors in view of the performance of the company and decide to invest or not. These results support previous studies (Wibowo, 2009) and Reinsren et al (1991), which proved that the implementation of fraud warning system gives a positive reaction in the eyes of investors. Investors assess that the company has implemented a fraud warning yange the present accounting system that is transparent and accountable reporting is one of the real form of prevention of fraud, it also indicates that the company has been trying to leverage in managing the organization to improve organizational performance. 5. CONCLUSIONS The conclusion of this study are as follows: 1. Dividend policy proven effect on the prevention of fraud. This study supports the research conducted by Casey and Hanlon (2005) who found that companies that commit fraud are rarely (not) pay dividends and raise the size of the dividend compared to companies who do not commit fraud. 2. Information technology proven effect on the prevention of fraud. the implementation of information technology that helps enterprise IT activity in generating accurate information impacting greatly help prevent fraud (fraud) within enterprise organizations. The results are consistent with the statement proposed by Wilkinson and Cerullo (1997) who said that the implementation of information technology to meet the information needs of the business world very quickly, timely, relevant, and accurate so as to minimize errors whether intentional or not. 3. Accounting reporting proven effect on investor reaction. The results support the research conducted by Santoso (2008), which proved that the application of the accounting report in the public sector proved to prevent fraud. 4. The reaction of investors proved moderating influence diveden policy towards fraud prevention. Their dividend policy applied by the company in preventing fraud directly and indirectly affected investor reaction. Results of this study indirectly supports the research carried out by Hidayatullah et al (2012), where the research proves that the ROA, diveden policy and stock returns is a direct trigger of the reaction of investors. 5. The reaction of investors has not been proven to moderate the influence of information technology to the prevention of fraud. This result is due to the reality on the ground, investors are more likely to pay attention to the performance of the company as a whole from the published financial statements and did not examine the technology used in the company's financial reporting process their produce. 6. The reaction of investors proved to moderate the effect of accounting reporting to the prevention of fraud. These results support previous studies (Wibowo, 2009) and Reinsren et al (1991), which proved that the implementation of fraud warning system gives a positive reaction in the eyes of investors. Investors assess that the company has implemented a fraud warning yange the present accounting system that is transparent and accountable reporting is one of the real form of efforts to prevent fraud. 148

12 5.1 Suggestion As for suggestions that can provide the authors with respect to the limitations in this study are as follows: 1. For a company to increase the confidence of the shareholders of the company, the company should be able to show a good performance of the company and convey enough information to investors regarding the development of the company. 2. For investors and potential investors, before making an investment should seek out the company profile and the information disclosed by the issuer company, whether it meets the information needs of the investment analysis. 3. For further research is expected to use a different type of company and wearing broad scope of the sample. It is also expected to add other variables that may affect the prevention of fraud such as the company's internal control system as well as the reaction of investors such as earnings, interest rates, and others. REFFERENCES Aji Supriyanto. (2005). Pengantar Teknologi Informasi. Jakarta: Salemba Infotek. Agus Sartono, Manajemen Keuangan Teori dan Aplikasi. Yogyakarta: BPEF Yogyakarta. Auditing Standard Board Statement on Auditing Standards Number 78.American Institute of Certified Public Accountants,Inc. Caskey, J., dan M. Hanlon Do dividends indicate honesty? The relation between dividends and the quality of earnings.working paper, University of Michigan. Deddi Nordiawan Akuntansi Sektor Publik. Salemba Empat : Jakarta. Deddi Nordiawan, Iswahyudi sondi putra, Maulidah rahmawati Akuntansi Pemerintah. Salemba Empat: Jakarta. Devaraj, S. and Kohli, R Performance Impacts Of Information Technology: Is Actual Usage The Missing Link? Management Science. (49:3). pp Easterbrook, F Two agency-cost explanations of dividends.the American Economic Review 74: Ghozali, Imam Aplikasi Analisis Multivariate Dengan Program SPSS. Semarang: Badan Penerbitan Universitas Diponegoro. Glassman, J When numbers don t add up.kiplinger s (August): Goodhue,D.IdanThompson.R.L Task TechnologyandIndividualPerformance. MIS Quarterly, Juni Hanafi, Mamduh. (2004). Manajemen Keuangan, BPFE, Yogyakarta IAI Standar Akuntansi Keuangan. Jakarta: Salemba Empat. Jones, R dan M. Pendlebury Public Sector Accounting. 5th Edition. Pitman Publishing, London. 149

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