PERSPECTIVE OF FRAUD HEXAGON THEORY: DETERMINANTS OF FINANCIAL STATEMENT FRAUD (CASE STUDY OF BANKING COMPANIES LISTED ON THE INDONESIAN STOCK EXCHANGE IN 2020-2022)

Abstract

The objective of the study is to examine the influence of external pressure, financial stability, ineffective monitoring, change in auditor, change in director, CEO Duality and political connection disclosure on a company's fraudulent financial reporting. The population in this study included the banking companies listed on the Indonesia Stock Exchange from 2020 to 2022. The samples were determined using the purposive sampling technique with several predetermined criteria, resulting in a total of 111 samples. The data used in this study is secondary data obtained from the company's annual reports, financial statements, and independent auditor's report. The data analysis technique used is panel data regression using Eviews 12 to test each hypothesis in this study. The results of this study demonstrate that external pressure measured by leverage ratio and financial stability measured by change in assets can improve the company's fraudulent financial reporting. Additionally, ineffective monitoring by the presence of the board of independent commissioners less than the entire board of commissioners in the company can also enhance the company's fraudulent financial reporting. However, change in auditor, change in director, CEO Duality and political connection does not affect the company's fraudulent financial reporting.