     The Company's external stakeholders find a lot of information from it's financial reports. Comprises data that serves as the foundation for decision making, such a cash flow, financial status, and financial performance. Financial report readers will be able to evaluate a company's efficacy and efficiency using the data offered in financial reports as a standard. In order to get financial report consumers' attention, management will therefore make every effort to portray financial report numbers as clearly as possible. But ocassionally, this might lead business to give investors false information in an attempt to appease them.
     The case of PT Kimia Farma in 2002 serves as an illustration of a manufacturing firm. Despite reporting a net profit of IDR 132 billion, the actual net profit was IDR 99,56 billion, substantially less than the declared amount. This indicates that the business made over IDR 32,44 billion in profit.
Keyword : PT. Kimia Farma, Financial Reports, and Financial Manipulation
     The rise in public companies both BUMN and private company as well as the number of prospective investors eager to put money into Indonesia are indicators of the country's economic advancement. PT Kimia Farma is one such example.
     The Dutch East Indies government established Kimia Farma, the country's first pharmaceutical manufacturing firm, in 1817. Beginning with the financial case handled by PT Kimia Farma in 2002, from PT Kimia Farma's financial report, which stated that a net profit of IDR 132 billion was made. The Ministry of BUMN and Bapepam, who thought the net profit was excessively high, expressed concern over this. A fair re- audit was carried out in response to these suspicious. This audit was conducted on October 3, 2002. The audit result indicate that there are dicrepancies between the current circumstances and the prior net income report. Additionally, Bapepam discovered multiple instances of errors. These included misstatements in PT Kimia Farma's financial statement that led to overstated profits in the company's net profit for the year that ended on December 31, 2001, totaling IDR 32,7 billion, or 2,3% of sales and 24,7% of net profit of PT Kimia Farma Tbk. The errors were discovered in a number of units that the accountant neglected to sample, including the Industrial Raw Materials unit, which overstated on saled of IDR 2,7 billion, and the Pharmaceutical Wholesalers unit, which overstated on 8,1 billion worth of inventory. Subsequently, the Indonesian Accountants Association (IAI) established the non - governmental organization BP2AP (Public Accountant Proffesion Judical Agency), which enforced administrative sanctions such as written warnings, fines, permit freezing, and permit revocation. Violates the Public Accountant Law Number 5 of 2011 (Chapter 55 and 56).
     Nevertheless, not all hazards, including the possibility of fraud, were eliminated by the audit examination that was conducted. It is feasible to perpetrate deception in a firm's financial report since financial report can explain how a company performs to draw in investors (Mukaromah & Budiwitjaksono, 2021).
     Fraud is defined as an act of deception or fraud involving the financial report presentation. Fraud typically takes the form of data modification or falsification, which can be detrimental to the company. Consequently, it is critical for investors to do a thorough examination of the company's perfomance and other risk factors in addition to relying just on audited financial reports.
     Public companies in Indonesia are required to provide financial report in order to uphold the principle of transparency in the application of sound and beneficial Good Corporate Governance (GCG) principles in order to detect and stop fraud cases, which frequently arise in the business environment. Ital et al. (2023) claim that effective financial repost presentation helps a company's environmental performance by boosting disclosure while also helping it comply with regulatory requirements.
     Whatever line of work you choose, all of your actions must be guided by relevent ethics. The goals of professional ethics itself include upholding employees' behavior and integrity, maintaining professional reputation or name, and providing guidelines that clarify and establish responsibilities to organizations and the public prefession.
     It has been established via the aforementiond incidents that a number of businesses falsify the financial reports that are provided to users in order to provide a positive image of the business and entice investors to make investments. This demonstrates that the business has committed fraud and fails to accurately disclose the circumstances. There are undoubtedly a lot of internal and external actors involved in fraud.
Author : Yessyka Meiliyadina (2330203030218) , Vioni Azira (2330303030245)
