Exploring the Dimensions of Heptagon Fraud in Financial Reporting Practices

Abstract

Financial reporting fraud remains a pervasive issue in corporate governance, challenging the  integrity and transparency of financial statements. The existing models, while robust, may lack  certain socio-cultural dimensions that influence unethical behaviors in financial reporting. This  study aims to explore and expand the Heptagon Fraud Model by introducing religiosity as a  new dimension, thereby offering a more holistic view of the factors influencing fraudulent  practices. Using a survey research method, data were collected from 165 employees of public  companies in Indonesia. The findings indicate that religiosity plays a significant role in  moderating fraudulent behaviors, alongside the traditional dimensions of fraud. Furthermore,  the study confirms that the integration of religiosity into the Heptagon model enhances its  explanatory power and applicability in diverse cultural contexts. This research contributes to  the existing body of knowledge by highlighting the importance of socio-cultural factors in fraud  prevention and providing insights for policymakers and practitioners to develop more effective  anti-fraud strategies. The incorporation of religiosity into the Heptagon model offers a novel  approach that could be instrumental in strengthening the ethical framework within financial  reporting practices.