How is financial reporting fraud with the fraud hexagon approach before and during Covid-19 pandemic?

Abstract

This study investigates the impact of fraud hexagons on financial statement fraud in property and real estate sector companies listed on the Indonesian stock exchange before and after the covid-19 outbreak. The study's sample size was 168 data points. To evaluate the hypothesis, the data analysis approach employs logistic regression, as well as sample paired t-tests and the McNemar test. The findings revealed that financial statement fraud was influenced by pressure, rationalization, and capability. Meanwhile, chance, arrogance, and collaboration have little effect on financial statement fraud. The disparity in values between before and during the covid-19 epidemic had a substantial impact on financial stability. Other factors, on the other hand, indicate no significant differences in value when comparing before and after the Covid-19 epidemic. This study has consequences for stakeholders, the government, and the general public in terms of being aware of the likelihood of fraud when a phenomenon such as the covid-19 epidemic occurs.

Determination of the Fraud Hexagon on the Tendency of Fraudulent Financial Reporting in the Provinces of Indonesia

“…This study aligns with previous research by Sagala & Siagian, (2021), Achmad et al, (2022), andTriyanto et al, (2023) that suggests pressure influences the tendency of fraudulent financial reporting. On the other hand, contrary to Fadly et al, (2020) and Erliani et al, (2023) who did not find any effect of pressure on the tendency of fraudulent financial reporting.…”

“…The results of this study are consistent with the research conducted by Sukmadilaga et al, (2022), Septiningrum & Mutmainah, (2022), Alfarago et al, (2023) which states that capability has no effect on the tendency of fraudulent financial reporting. However, it is not consistent with the research conducted by Aviantara, (2021) and Triyanto et al, (2023) who say that capability has a positive effect on the tendency of fraudulent financial reporting and is not consistent with the research of Sari & Khoiriah, (2021) who says that capability has a negative effect on the tendency of fraudulent financial reporting.…”