The phenomenon of tax fraud has rarely been highlighted in the literature. This addition was made in order to provide a new logic, thinking that the fraud financial statement is also related to the sakes of tax evasion or fraud. The population of this study was 1,053 auditors and the percentage level of leeway used was 10%. The questionnaires distributed were 300 copies, or 28.49% of the population. The method of analysis was applying partial least square (PLS). This study found that the level of forensic accounting and tax forensic knowledge had a positive effect on the prevention of fraud financial statements in the new normal era in Indonesia at this time. Although there were many studies on forensic accounting, none had collaborated with the level of forensic tax knowledge. It seems that there are some parties who are afraid when there is education about forensic tax knowledge in Indonesia, especially the new normal period towards a new world order.
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Fraudulent practices (fraud) are still repeated in many countries, including Indonesia. Thus, research on fraud still has its own interests by some academics and practitioners. Based on data from the ACFE (Association of Certified Fraud Examines) in 2016 below, it presents that there are still many corruption cases that still occur, as if they reflect the government's role so far in preventing fraud still needs hard work. Fraud acts are categorized into 3 (three), namely corruption, misuse of state and / or company assets, and fraud in financial statements.
Based on data from (ACFE, 2016), it shows that 67% of the frauds that were most detrimental to Indonesia were corruption. Meanwhile, the rest is an act of misuse of government and / or company assets and fraud financial statements. This, of course, requires efforts from the government to prevent eradication by tightening it through regulations for institutions allowed to undertake corruption or fraud through the BPK, BPKP, Inspectorate, KPK (commission corruptions) and by NGOs, such as MTI and ICW. However, all these efforts are deemed insufficient for the government to penetrate the solid wall of the perpetrators of fraud or corruption.
These three categories of fraudulent acts have caused losses to the country. However, from the three categories of fraud that have been disclosed, we will focus on one category of fraud, namely the fraud financial statement (fraudulent financial statements). Financial statements are very important for the survival of an entity. In addition, financial reports are also applied by potential investors as useful financial information for their decision making. Meanwhile, the important financial information in the financial statements is profit. When the profit generated by an entity reaches the target or even exceeds the company's target, then this can certainly prosper the stakeholders and the period of the entity itself. However, the problem that occurs is that the stakeholders do not know factually during preparing the financial statements whether the earnings information is under the company's operational activities or not. The perception of these stakeholders arises because they do not monitor the company's operational activities every day, so it is necessary to re-examine the financial statements, especially the profit information. Therefore, an occasion known as earnings management practices emerged (Meckling, 1976).
(Jaya, 2020; Wells, Joseph T., 2010) also agree that one concrete example of fraud financial statements is the practice of earnings management. This earnings management activity can be carried out in several steps, such as manipulating financial records, supporting documents or other business transactions, deliberately eliminating evidence of transaction notes, accounts, or other significant information during the financial reporting process, selecting accounting principles, wrong and deliberate policies, and procedures that are used to measure, acknowledge, report, and disclose the economic occasions and business transactions of an entity (Rezaae, 2002). In addition, several literatures have revealed several motivations for this earnings management practice, such as bonus plans, tax avoidance, debt motivation, and political motivation (Healy, 1985; Jones, 1991; Watts & Zimmerman, 2006). This literature evidence also points out that earnings management practices have occurred for a long time and until now the emphasis is still not maximal.