A Literature Review on Financial Statement Fraud in the Perspective of Fraud Hexagon Theory: Evidence from the Financial Industry
Keywords:
Fraud Hexagon , Fraudulent Financial Reporting , Banking, Financial IndustryAbstract
This study aims to analyze the potential for fraudulent financial reporting in the financial industry, particularly in banking institutions and insurance companies such as Jiwasraya, using the Fraud Hexagon framework which consists of stimulus, opportunity, rationalization, capability, ego, and collusion as the driving factors of fraud. Fraudulent financial reporting poses considerable risks to investors, creditors, and other stakeholders, especially under economic pressure that encourages management to manipulate financial statements to maintain favorable performance. Previous studies indicate that stimulus, capability, ego, and collusion significantly influence fraudulent financial reporting, while opportunity and rationalization show no substantial effect in the financial industry context. These findings highlight the necessity of strengthening corporate governance, internal control systems, and the audit committee’s supervisory function to reduce the risk of fraud within the financial sector.
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Copyright (c) 2026 Irfan Mawardi, M. Abdul Muin Bahajjad, M. Dimas Perkasa, Deliana Deliana, Rizky Syahputra (Author)
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