Abstract
This study aims to detect fraudulent financial reporting using hexagon fraud analysis, including seven factors: financial stability, external pressures, ineffective monitoring, auditor changes, change in director, arrogance, and collusion. The subject of this research is a public company consolidated audit report of state-owned enterprises. The existence of conflicting results, the phenomenon of fraudulent financial reporting, and limited research using the hexagon of fraud theory prompted this research to examine the factors that influence fraudulent financial reporting. The sample was selected using a sampling technique, with the criteria of state-owned enterprises listed on the Indonesia Stock Exchange in 2016–2020. The method used is quantitative, and the analytical method used is logistic regression analysis. The sampling technique used was purposeful sampling, so the number of samples was 125. The results of this study indicate that financial stability and external pressures have a positive effect on fraudulent financial reporting. However, ineffective monitoring, auditor changes, change in director, arrogance, and collusion do not affect fraudulent financial reporting.
Highlights
According to the Association of Certified Fraud Examiners (ACFE) Indonesia (2020)survey data, 70% of fraud in Indonesia is corruption
The 2019 ACFE survey results showed financial fraud of 6.7%, resulting in a loss of IDR 2,260,000,000 or 9.2%. This indicates that fraudulent financial reporting increases every year (Association of Certified Fraud Examiners (ACFE) Indonesia 2020)
This study aims to detect fraudulent financial reporting using hexagon fraud analysis, including seven factors: financial stability, external pressures, ineffective monitoring, auditor changes, change in director, arrogance, and collusion
Summary
According to the Association of Certified Fraud Examiners (ACFE) Indonesia (2020). Survey data, 70% of fraud in Indonesia is corruption. The 2019 ACFE survey results showed financial fraud of 6.7%, resulting in a loss of IDR 2,260,000,000 or 9.2%. This indicates that fraudulent financial reporting increases every year (Association of Certified Fraud Examiners (ACFE) Indonesia 2020). Association of Certified Fraud Examiners (ACFE) Indonesia (2020) shows that the most common frauds in Indonesia are corruption, with a rate of 70 with 167 cases, abuse of state/property, and business ownership with a rate of 21 and a total of 167 points. There were nine percent fraudulent financial reporting that caused losses with 22 cases
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