Fraud Heptagon Analysis from the Perspective of the Beneish M-Score

Sri Luna Murdianingrum; Eva Dwi Astuti; Erissa Dwi Yunita Sary; Ninggih Annisa Daniswara

doi:10.32535/jicp.v9i4.5178

Fraud Heptagon Analysis from the Perspective of the Beneish M-Score

Sri Luna Murdianingrum, Eva Dwi Astuti, Erissa Dwi Yunita Sary, Ninggih Annisa Daniswara

Abstract

This study examines the influence of Fraud Heptagon elements financial stability, nature of industry, change in auditor, change in director, CEO duality, insufficient corporate governance courses, and remuneration on financial statement fraud in construction companies listed on the Indonesia Stock Exchange during 2021–2025. Fraud was measured using the Beneish M-Score model. This quantitative study uses secondary data from annual reports, analyzed through logistic regression with SPSS 26. Results show that financial stability has a significant positive effect on financial statement fraud. The other variables nature of industry, change in auditor, change in director, CEO duality, insufficient corporate governance courses, and remuneration show no significant effect. This indicates that in the construction sector, financial pressure is the primary driver of fraud, whereas opportunity, rationalization, capability, arrogance, collusion, and greed can be mitigated by industry characteristics, regulatory compliance, and governance mechanisms.

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DOI: https://doi.org/10.32535/jicp.v9i4.5178

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