Detecting Fraudulent Financial Statement Using the Fraud Hexagon Approach with Operational Complexity as a Moderating Variable (Empirical Study on Companies Listed on the Indonesia Stock Exchange 2022–2024)

  ABSTRACT : This study aims to examine the effect of the Fraud Hexagon elements pressure, capability, opportunity, rationalization, arrogance, and collusion on financial statement fraud, as well as the moderating role of operational complexity in companies listed on the Indonesia Stock Exchange (IDX) during the 2022– 2024. This research employs a quantitative descriptive approach using the Partial Least Squares–Structural Equation Modeling (PLS-SEM) method with SmartPLS 4.0. The sample consists of publicly listed companies selected through purposive sampling, with secondary data obtained from the official IDX website and annual reports. The results show that the empirical results indicate that capability and arrogance have a significant positive effect on financial statement fraud, while pressure, opportunity, rationalization, and collusion show no significant influence. The moderating analysis reveals that operational complexity strengthens the effects of capability, arrogance, and collusion on financial statement fraud, but does not moderate the relationships involving pressure, opportunity, or rationalization. These results highlight the importance of managerial characteristics and organizational structure in understanding fraudulent financial reporting practices. This study contributes theoretically by reinforcing the Fraud Hexagon Theory as a comprehensive framework for detecting fraudulent financial reporting.

KEYWORDS – arrogance, capabilty, complexity in companies, fraud hexagon, fraudulent financial statement