Economies · 2022 · 97 citations · 25 references
BusinessAccountancyAccountingAuditingCorporate ReportingFinancial AccountingFinancial ReportingFinancial Statement AuditsFinancial Statement FraudFraud DetectionFraud ExaminationFraud ReportingFalse Financial ReportingFinancial Stability EffectsFinancial Stability ImpactFinancial Statement Fraud DetectionLogistic Regression Analysis
Conflicting evidence and limited hexagon‑of‑fraud studies motivate investigation of factors driving fraudulent financial reporting in state‑owned enterprises. The study seeks to detect fraudulent financial reporting in Indonesian state‑owned enterprises using a hexagon fraud framework of seven factors. Using a purposeful sample of 125 Indonesian state‑owned enterprises listed on the stock exchange from 2016–2020, the authors applied quantitative logistic regression to consolidated audit reports to assess the hexagon fraud factors. Financial stability and external pressures significantly increase the likelihood of fraudulent financial reporting, whereas ineffective monitoring, auditor changes, director changes, arrogance, and collusion have no significant effect.
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.
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