The Fraud Hexagon Model and Corporate Governance Moderation in the Investigation of Financial Statement Fraud

The Fraud Hexagon Model and Corporate Governance Moderation in the Investigation of Financial Statement Fraud

Board Effectiveness, Collusion, Fraud, Hexagon Mode

Manipulation of financial statements for personal or organizational objectives that could cause harm to others is known as financial statement fraud. After advancing through the triangle, diamond, and pentagon models, the notion of financial statement fraud has expanded in recent years. The stimulus, capability, collusion, opportunity, rationalization, and ego components of the preceding theory are expanded upon in the hexagon theory. This study explores the association between the Hexagon Theory component and financial statement fraud, using corporate governance as a moderating variable. The 235 sets of information derived from the annual reports of publicly traded real estate and property companies on the Indonesia Stock Exchange were observed for this quantitative study, and they were then analyzed using a panel data regression model processed with the EViews program. Result findings demonstrate that financial statement fraud is influenced by external pressure as proxy of stimulus. Additionally, it has been demonstrated that corporate governance moderates the association between financial statement fraud and opportunity, rationalization, ego, and stimulus

Enggar Diah Puspa Arum1, Ilham Wahyudi2

https://dinastipub.org/DIJEFA/article/view/2547/1708

Universitas Jambi

12May2024

enggar_diah@unja.ac.id

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