The Likelihood of Fraud from The Fraud Hexagon Perspective: Evidence from Indonesia


  • Dio Alfarago Directorate General of Taxes, Indonesia Ministry of Finance
  • Muhammad Syukur Mae Fah Luang University
  • Azas Mabrur Polytechnic of State Finance STAN (PKN STAN)

DOI: 10.14456/abacj.2023.3
Published: 2023-01-24


Beneish M-Score; Financial Statement Fraud; Fraud Hexagon; Indonesia


Fraudulence can cause financial loss and investor mistrust. Fraud is not only unethical but also a punishable sin. As the impact is enormous, it is crucial to examine what factors motivate or impact a company to commit fraud. Literature has archived several models to explain elements of fraudulent activities, such as the Fraud Triangle, Fraud Diamond, and Fraud Pentagon. Georgios L. Vousinas introduced the fraud hexagon in 2019, the latest model exhibiting six factors that motivate companies to commit fraud. This model consists of stimulus (pressure), capability, collusion, opportunity, rationalization, and ego (arrogance). This research aims to examine the effect of the fraud hexagon elements on the likelihood of fraud. Seventy-six manufacturing firms listed on the Indonesia Stock Exchange during 2015-2019 were chosen to be included in the sample. This study uses the Beneish M-Score model to separate companies likely to commit fraud. Logistic regression analysis was then used to test the hypothesis. The findings indicate that stimulus impacts the likelihood of fraud.