6. Fraud Hexagon: Detection of Fraud on State-owned Enterprises’ Financial Report in Indonesia

Abstract

This study aims to examine the fraud hexagon elements which consist of pressure, capability, collusion, opportunity, rationalization, and ego in detecting fraud in financial statements. The population in this study were state-owned companies with an observation period of 10 years, from 2010 to 2019. After testing, it was found that the research data was not normally distributed, so the researchers decided to eliminate outlier data, using the outlier boxspot method and obtained 153 samples data using multiple linear regression. The results of the study show that pressure has a positive effect on Financial Report Fraud practices. Meanwhile, capability, collusion, opportunity, rationalization, and ego are not proven to be able to detect Financial Report Fraud.

Keywords

• Fraud Hexagon
• Financial report
• State-Owned Enterprises