- MOTIVES OF MANAGEMENT'S OPPORTUNISTIC BEHAVIOR IN FRAUDULENT FINANCIAL REPORTING IN MANUFACTURING COMPANIES LISTED ON THE BEI:

Akbar Wahyudi Adi Saputra; Acep  Komara; Mada Purwanto Wahyu Nugroho

doi:10.63922/ijebir.v5i03.3469

Akbar Wahyudi Adi Saputra Faculty of Economics and Business, Swadaya Gunung Jati University.
Acep Komara Faculty of Economics and Business, Swadaya Gunung Jati University. https://orcid.org/0009-0009-8868-2934
Mada Purwanto Wahyu Nugroho Faculty of Economics and Business, Swadaya Gunung Jati University.

DOI: https://doi.org/10.63922/ijebir.v5i03.3469

Keywords: Fraudulent Financial Reporting, Fraud Hexagon, Opportunistic Behavior, F-Score, Manufacturing Companies

Abstract

Fraudulent financial reporting represents a critical corporate issue because it diminishes the reliability of accounting information and may negatively affect investors, creditors, regulators, and broader stakeholders. This study was conducted to examine determinants influencing the risk of fraudulent financial reporting by applying the Fraud Hexagon Theory framework to manufacturing companies listed on the Indonesia Stock Exchange (IDX). A quantitative explanatory design was employed using secondary data derived from annual reports and financial statements during 2022–2024. Through purposive sampling, 60 manufacturing firms were selected, generating 180 firm-year observations. Fraud risk was proxied using the F-Score Model, while hypothesis testing utilized Structural Equation Modeling–Partial Least Squares (SEM-PLS). Empirical findings indicate that the explanatory capacity of Fraud Hexagon variables toward fraudulent financial reporting remains relatively limited. Nevertheless, nature of industry and political connection variables demonstrated statistically meaningful effects at the 10 percent significance level. In contrast, external pressure, change in director, change in auditor, and CEO pictures were not found to significantly influence fraudulent financial reporting. These findings imply that industrial operational characteristics and political affiliations may provide important early warning indicators for identifying fraudulent financial reporting practices in Indonesian manufacturing firms.

Keywords: Fraudulent Financial Reporting, Fraud Hexagon, Opportunistic Behavior, F-Score, Manufacturing Companies.

Author Biography

Acep Komara, Faculty of Economics and Business, Swadaya Gunung Jati University.

Acep Komara is associate professor in accounting, his field reseacrh in management accounting, CSR, Green Accounting and Sustainbility. Acep komara is lecturer in accounting departement university of swadaya gunung jati, Cirebon, West Java, Indonesia.

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