Analysis of Hexagon Fraud Influence on Fraudulent Financial Statements in Banking Companies Listed on the Indonesia Stock Exchange 2020–2024: An Islamic Business Ethics Perspective

Abstract

This study aims to examine the influence of Hexagon Fraud theory comprising financial target, nature of industry, change in auditor, change in director, CEO duality, and state-owned enterprise (SOE) status on fraudulent financial statements in banking companies listed on the Indonesia Stock Exchange (IDX) during 2020 2024, analyzed within an Islamic business ethics framework. Employing a quantitative research design with secondary data drawn from the annual financial reports of seven purposively selected banking companies, this study detects financial statement manipulation using the Beneish M-Score model and tests hypotheses through multiple linear regression in SPSS 26. All classical assumption tests including normality, multicollinearity, heteroscedasticity, and autocorrelation confirm that the model satisfies the required statistical criteria. The findings reveal that financial target and nature of industry exert a significant positive influence on fraudulent financial statements, while change in auditor, change in director, and CEO duality yield no statistically significant effects. Notably, SOE status demonstrates a significant positive association with financial statement fraud, consistent with the collusion element of the Hexagon Fraud model. From an Islamic business ethics perspective, these results underscore the Quranic imperatives of honesty and justice (amanah and adalah) in financial reporting, as fraud is unequivocally condemned in Islamic teachings.