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Abstract

Purpose: This study aims to evaluate the effectiveness of corporate governance in influencing anti-money laundering efforts and financial statement fraud within banking firms listed on the IDX from 2018 to 2023.  
Methodology: The research employs an associative method with a quantitative approach. Data collection is based on quantitative data sourced from secondary materials, such as annual and financial reports of banking companies listed on the IDX during the 2018–2023 period. Using a purposive sampling technique, the research population of 46 firms was refined to a sample of 39 companies over six years, resulting in a total of 234 observations. The study incorporates both independent and dependent variables. The independent variable, representing corporate governance strength, is measured using the GCG self-assessment of banking institutions. Meanwhile, the dependent variables include financial statement fraud and anti-money laundering. Data analysis is conducted using logistic regression analysis.
Findings: The results indicate that strong corporate governance positively influences anti-money laundering measures while reducing the likelihood of financial statement fraud.
Originality: The novelty of this study is looking into money laundering in banking, which is under-researched topic, modifying the Beneish M-Score, and evaluating GCG through self-assessment.