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Hexagon Fraud: Detection of Fraudulent Financial Statement in Indonesia

In: Proceedings of the International Conference on Business, Accounting, Banking, and Economics (ICBABE 2022)

Author

Listed:
  • Julia Rachma Handayani

    (Universitas Muhammadiyah Semarang, Department of Accounting)

  • Nurcahyono Nurcahyono

    (Universitas Muhammadiyah Semarang, Department of Accounting)

  • Nailis Saadah

    (Universitas Islam Sultan Agung, Department of Accounting)

  • Winarsih

    (Universitas Islam Sultan Agung, Department of Accounting)

Abstract

Economic growth has positively impacted companies in Indonesia, as seen from the many companies that register their companies every year to enter the capital market. This phenomenon affects very rapid competition in the business sector and can lead to crimes, one of which is fraudulent financial reporting. This phenomenon is caused because each entity must submit accurate and relevant financial information. So it is essential to know what indicators can be used to identify fraudulent financial statements. The goal to be achieved from the results of this study is to empirically determine the effect of financial stability, several directors turnover, e-procurement, whistleblowing system, government ownership, and Frequent Number of CEO pictures on fraudulent financial statements. This study uses a quantitative approach. The population of this study is state-owned enterprises companies in 2017–2021, listed on the IDX, namely 105 companies. Using a purposive sampling technique, 21 companies were studied. The analytical method in this study is Multiple Linear Regression Analysis which is processed using the SPSS 26 application. The results show that financial stability, a director change, e-procurement, whistle-blowing systems, and government ownership positively affect fraudulent financial statements. In contrast, the frequent variable number of CEO pictures has a negative impact on financial statement fraud.

Suggested Citation

  • Julia Rachma Handayani & Nurcahyono Nurcahyono & Nailis Saadah & Winarsih, 2023. "Hexagon Fraud: Detection of Fraudulent Financial Statement in Indonesia," Advances in Economics, Business and Management Research, in: Chih Wen-Hai & Ali Mursid (ed.), Proceedings of the International Conference on Business, Accounting, Banking, and Economics (ICBABE 2022), pages 263-276, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-154-8_24
    DOI: 10.2991/978-94-6463-154-8_24
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