Fraud Detection of Financial Statements through the Fraud Hexagon Approach in Indonesian SOEs

Aims: This study aims to detect fraudulent financial statements through the Fraud Hexagon approach in Indonesian SOEs period 2011-2019

Study Design: This study applied the quantiative descriptive method.

Place and Duration of Study: Financial Services Authority, Period 2011-2019

Methodology: This data used in this research is secondary data based on the companies’ financial statement. The population used are SOEs companies in Indonesian during the year 2011 – 2019 and the sampe are 4 banks. Thetechnique of data analysis applied is regession data panel.

Results: According to the results shows that external pressure, nature of industry, effective monitoring, financial target, capability, personal financial need, rationalization, ego, and also collusion give no influence toward the fraud of financial statement. The variable financial stability gives negative influence toward the fraud of financial statements.

Conclusion: Of the 10 hypotheses and 2 control variables (Size and Firm Age) proposed, it was found that there was 1 variable that had a negative effect on report fraud. financial statements and others have no influence toward the financial statements.