An Analysis of Fraud Hexagon in Detecting Financial Statement Fraud (Empirical Study of Listed Banking Companies on Indonesia Stock Exchange for Period 2017 – 2019)

Abstract

Cases of fraud are increasing from year to year. The most costly type of fraud is financial statement fraud. This kind of fraud causes substantial losses for the company and users of financial statement. The aim of this research is to analyze fraud hexagon in detecting financial statement fraud of banking companies listed on Indonesia Stock Exchange for the period 2017-2019. The research population is 46 banking companies listed in Indonesia Stock Exchange. Purposive sampling method is used on this research. The sample chosen with matching criteria is 41 companies with a total observation of 123. Logistic regression method is used to analyze data. The research results indicated that the financial target, external pressure, ineffective monitoring, change in auditor, change in director, and frequent number of CEO's picture do not have an effect in detecting financial statement fraud on listed banking companies. Meanwhile, collusion has an effect in detecting financial statement fraud on listed banking companies.