Factors That Influence Fraud Heptagon Theory On Financial Statements Fraud (Empirical Study on the Mining Sector Listed on the Indonesia Stock Exchange for the Period 2018-2022)

: This research was conducted on Mining Sector companies listed on the Indonesia Stock Exchange from 2018 to 2022. The purpose of this study was to determine the effect of Fraud Heptagon Theory on Financial Statement Fraud using the F-Score Model partially and simultaneously. This study used quantitative methods, namely data obtained from secondary data in the form of annual reports. The sample in this study were 25 mining sector companies on the Indonesia Stock Exchange with a purposive sampling method. The data analysis used is data panel regression using the Eviews 12 application program. The results of the research on partially, pressure and ignorance has an effect on financial statement fraud, while opportunity, rationalization, competence, arrogance, and greed have no effect on financial statement fraud. Simultaneously, pressure, opportunity, rationalization, competence, arrogance, ignorance, and greed have no effect on financial statement fraud. Based on the results of research and discussion on Fraud Heptagon Theory towards Financial Statement Fraud, it can be concluded that partially Pressure and ignorance have a significant effect on Financial Statement Fraud.


INTRODUCTION
Multinational companies have experienced significant development with expansion to various countries around the world.These multinational companies (MNCs) have a high operational complexity, which includes various legal jurisdictions, tax regulations, and different accounting standards.In addition, national companies have also experienced rapid development in terms of innovation, technology, and market expansion.Both multinational and national companies face great pressure to produce reliable and accurate financial reports to meet the needs of various stakeholders, including investors, creditors, regulators, and the public.However, operational complexity and pressure to achieve high financial targets often drive fraud in financial statements.
Fraud consists of 3 (three) components, namely pressure related to urgent financial or personal needs that encourage individuals to commit fraud, opportunity which is a situation or environment that allows individuals to commit fraud without being found Ranny Ariany Djami, Murtanto |86 out and rationalization (rationalization)) which is a justification made by the perpetrator to consider their actions as something acceptable.Of these three components, it is known as the Fraud Triangle Theory developed by (Cressey Donald, 1953).This theory has undergone a development known as the Fraud Diamond Theory which was initiated by Wolfe and Hermanson in 2004.The addition in this fraud component is capability, which means the ability or skill possessed by an individual to carry out fraud.(Marks, 2012) added two components in detecting individuals or groups to commit fraud, including competency which includes the technical ability to commit fraud and ego (arrogance) which includes an attitude of superiority that feels that the rules do not apply to them.This theory is called the Fraud Pentagon Theory.(Vousinas, 2019) developed this theory as the S.C.O.R.E.Model, namely the components of pressure, opportunity, capability, rationalization, and ego.An additional component in the Fraud Hexagon Theory by (Vousinas, 2019) is the collusion component which is the cooperation between two or more individuals to obtain something for personal benefit or a group by committing fraud.Furthermore, this theory developed into the Fraud Heptagon Theory developed by (Reskino, 2022) by adding two dimensions of fraud that come from religious and cultural factors.Individuals who have been radicalized by certain religious ideologies may commit fraudulent or criminal acts in the belief that they are doing something right or ordered by God.This can be seen in the context of extremists who use religion as a justification for various illegal acts.Meanwhile, a culture with a high level of tolerance for fraud can create an environment where such behavior is more common and accepted.
Based on research conducted by (Carla & Pangestu, 2021) states that the arrogance of being a CEO duality can affect fraudulent financial statements, as evidenced by the existence of a kinship relationship between the board of commissioners and the president director which makes the function of the board of commissioners not optimal so that there is a sense of arrogance in the president director.The results of the research by (Nurardi & Wijayanti, 2021) stated that pressure has an effect on the detection of financial statements.(Rukmana, 2018) said that when arrogance increases, cheating also increases.Research conducted by (Khamainy, Amalia, Cakranegara, & Indrawati, 2022) explains that pressure, collusion and opportunity have predictive relevance to financial statement fraud.Although out of ten hypotheses only three are proven, these results imply that the company is facing a difficult situation and is unable to achieve its financial targets.In contrast to the research conducted by (Yadiati & Rezwiandhari, 2023) explained that simultaneously financial stability (stimulus), external pressure (stimulus), the nature of the industry (opportunities), auditor changes (ability), directors changes (rationalization), a lot of CEO images (arrogance), and cooperation with government projects (collusion) have a positive effect on detecting fraud in SOE financial statements.
The Association of Certified Fraud Examiners (ACFE) describes three main groups of fraud that generally occur in a pattern called "The Fraud Tree", including corruption, asset misappropriation, and fraudulent statements.
87| Marketing Mix Analysis In Increasing Furniture MSMEs Sales Volume In Cirebon District Based on the ACFE survey contained in the Report to The Nations 2024, cases of financial statement fraud that deliberately cause misrepresentation or material negligence in an organization's financial statements are a rare category with a percentage of 5% but cause the largest median loss of $766,000.In addition, from a case perspective, the mining sector (mining) is in first place with an average loss of $550,000 and 24 cases have occurred.
One example of a case that occurred in the mining sector is a fraud case involving Vale SA, a large mining company in Brazil that faced allegations of manipulating financial statements after the Brumadinho dam disaster in 2019.Internal documents show that Vale classified dam 1 at the Corrego do Feijao mine as twice as likely to fail than the maximum level of risk that can be tolerated under the company's own dam safety policy.The previously unreported document is the first evidence that Vale has been concerned about the safety of the dam.This raises the question of why audits conducted around the same time actually ensure the stability of the dam.In addition, why did Vale not take precautions, such as moving the Company's canteen that was on the slopes.From the case, the investigation revealed that the company had hidden important information about the actual condition of the dam (News.Detik.com, 2019).
Most financial statement fraud scandals are one of the important reasons to be analyzed, in order to minimize financial statement fraud, and not add to state losses.The measuring tool used to detect financial statement fraud is the method popularized by Beneish in 1999.There are two methods used, namely, Beneish M-Score and F-Score.Beneish M-Score is a financial statement fraud prediction model, where the ratios contained in it have been proven to have the ability to predict financial statement fraud (Beneish, 1999).Meanwhile, the F-Score model is a development of M-Score which is made specifically to get a score directly without using an index.
The difference between this study and the previous study lies in the independent variables where the previous researcher used the culture and religiosity variables in testing fraud heptagon theory while the researcher used the variables ignorance and greed.In addition, the research method used in the form of a questionnaire was disseminated to auditors in DKI Jakarta while the researcher used the mining sector listed on the Indonesia Stock Exchange as an empirical study in this study.

Ranny Ariany Djami, Murtanto |88
This paper aims to convey the results of research on Factors Influencing Fraud Heptagon Theory Towards Financial Statement Fraud (Empirical Study on Mining Sector Companies Listed on the Indonesia Stock Exchange for the 2018-2022 Period).

Stakeholder Theory
The term stakeholder was first developed by R. Edward Freeman in his book entitled "Strategic Management: A Stakeholder Aprroach" published in 1984.Freeman introduced this concept to describe and analyze how the various groups and individuals who have an interest in an organization influence and are influenced by the decisions and actions of that organization.According to (Budi, 2021), stakeholder theory explains that the relationship between companies and stakeholders arises due to the growing awareness that companies have stakeholders, that is, all stakeholders have the same right to contribute to decision-making.

Fraud Heptagon Theory
The theory of fraud was first introduced by (Cressey Donald, 1953) in his research entitled "Other People's Money: A Study in the Social Psychology of Embezzlement".In his research, it was explained that there are three factors in the fraud situation, including: 1. Pressure Pressure can occur when a related party, either employees or management, wants to hide the fraud committed which is caused by pressure from good factors financial and non-financial (Skousen, Smith, & Wright, 2009).According to Albrecht et al (2017:356) Stress can be divided into four main groups: (1) financial pressure, (2) pressure to commit evil deeds, (3) work-related pressure, and (4) other pressure.

Opportunity
Opportunity is an opportunity for someone to commit fraud.The condition that encourages someone to commit fraud is the absence of good control so that they feel there is an opportunity to commit fraud without being detected (Mulya et al, 2019).Statement on Auditing Standard No.99 in Rahmatullah (2019) states that opportunities for financial statement fraud can occur in three categories, namely: a.The nature of industry is a situation related to the occurrence of risks for companies in an industry that involves subjective estimates and considerations so that it can provide opportunities for fraud to occur.b.Ineffective monitoring, is a situation where the company does not have enough supervision to monitor the company's performance so that it provides opportunities for management to commit fraud.c.Organizational structure, a complex and unstable organizational structure, is one of the opportunities for someone to commit fraud.

Rationalization
Rationalization can be interpreted as individuals who commit fraud will seek justification for activities that contain fraud.This action is believed to have occurred because the perpetrator fraud demanding that more profits must be generated in return for the actions taken (Andriani, 2019).Statement on Auditing Standard No.99 in (Rahmatullah, 2019) states that rationalization in companies can be measured by the auditor turnover cycle (change in auditor), the audit opinion obtained by the company and the total accrual state divided by total assets.Three factors fraud by Cressey which 89| Marketing Mix Analysis In Increasing Furniture MSMEs Sales Volume In Cirebon District Fraud theory has developed with the emergence of the fraud diamond theory developed by (Wolfe & Hermanson, 2004).Fraud diamond is a refinement of the fraud triangle carried out by (Cressey Donald, 1953) by adding one component that is believed to be influential in detecting fraud, namely capability.Fraud will not happen without the right person with the right ability to carry out every detail of the fraud.Traits that reflect the ability of the perpetrator of fraud include position, intelligence, and coercion ability.The description of diamond fraud is as follows:

Competence
According to (Marks, 2012), competence is the ability of employees to override internal controls, develop concealment strategies, and to control social situations for their own benefit by selling them to others.

Arrogance
The next component is arrogance.(Marks, 2012) explained that arrogance is an attitude of superiority over the rights they have and feels that internal control or Ranny Ariany Djami, Murtanto |90 company policies do not apply to them.The term arrogance in the Great Dictionary of Indonesian is "arrogance and arrogance" which means the attitude towards the actions of a person who wants to show the public about status or position.The description of the pentagon fraud is as follows:  (Vousinas, 2019) in (Kusumosari & Solikhah, 2020), collusion is a collaboration carried out by several parties, both by individual groups and parties outside the organization, as well as between employees within the organization.When collusion fraud occurs, honest employees will participate in cheating due to an dishonest environment.Collusion can also be done by utilizing the ability to take the position of others.These six factors can be seen in thefollowing figure: Fraud Heptagon Theory is an evolution of the theory fraud developed by (Yusof, 2016) in his dissertation entitled "Fraudulent Financial Reporting: An Application of Fraud Models to Malaysian Public Listed Companies".This theory explains that there are two 91| Marketing Mix Analysis In Increasing Furniture MSMEs Sales Volume In Cirebon District factors that cause fraud that is ignorance and greed.Ignorance (ignorance) is represented as "lack of knowledge or information" according to Oxford (2008:502) in (Yusof, 2016).(Kruger & Dunning, 1999) describes the situation of ignorance as someone who mistakenly believes that he or she is knowledgeable and will not seek clarification on his beliefs, but instead relies on his position of ignorance.As a result, the person may also reject valid but contradictory information, without realizing its importance or understanding it.In contrast to greed (greed) which is generally related to "desire for possessions, wealth or power" according to Oxford (2008:441).Greed as part of personal financial pressure related to employee motivation to commit fraud (Rae & Subramaniam, 2008) in (Yusof, 2016).
In addition, the theory fraud also developed by (Reskino, 2022) in his dissertation entitled "Fraud Prevention Mechanisms and their Influence on Perfomance of Islamic Financial Institutions".This theory intends to fill in the gaps in the previous literature that slightly explained the occurrence of fraud from religious and cultural factors.According to the Great Dictionary of the Indonesian Language, religion is a teaching, a system that regulates the system of faith (belief) and worship to God Almighty as well as rules related to the association of humans and humans as well as humans and their environment.The previous five dimensions, namely pressure, opportunity, rationalization, competence and arrogance, are derived from theory fraud previously.(Reskino, 2022)explains that this theory is based on the premise that a person or group of people fraud Because of weak faith and the lack of a good culture in a company.

Financial Statement Fraud
Based on the Auditing Standard (SA) section 316 paragraph 04, misrepresentation arising from fraud in financial reporting is a misrepresentation of intentional omission of amounts or disclosures in financial statements to deceive users of financial statements.According to SA section 316 fraud in financial statements can concern actions as presented below: 1. Manipulation, falsification, or alteration of accounting records or supporting documents that are the source of data for the presentation of financial statements; 2. Misrepresentation in or omission from financial statements of events, transactions, or significant information; and 3. Misapplication of intentional accounting principles relating to amounts, classifications, ways of presentation, or disclosure.

Framework of Thought
Based on the explanation that has been described, the framework of thinking in this study is as follows: Ranny Ariany Djami, Murtanto |92 Research conducted by (Rahma & Sari, 2023) shows that financial stability has an effect on financial statement fraud, while external pressure and financial targets have no effect on financial statement fraud.Research conducted by (Handayati, 2023) shows that stimulus has a positive effect on fraud.In line with research conducted by Hakim et al (2023), it shows that pressure proxied by government projects has a significant effect on fraudulent financial statements , while financial target and financial stability do not have a significant effect on fraudulent financial reports in non-cyclicals.(Handayani, Evana, & Prasetyo, 2022) showed that external pressure is positively correlated with fraudulent financial reports.Based on this description, the following hypothesis is formulated: H1 : Pressure has a positive effect on financial statement fraud

The Effect of Opportunity on Financial Statement Fraud
Based on research conducted by (Azizah & Reskino, 2023), it shows that opportunity has no effect on the detection of fraudulent financial statements.In line with the research conducted by (Rahma & Sari, 2023), it shows that the nature of industry and effective monitoring have no effect on financial statement fraud.Research conducted by (Handayati, 2023) shows that opportunity has a positive effect on fraud.Research conducted by (Khamainy et al., 2022) shows that the nature of industry as a proxy of opportunity has predictive relevance to financial statement fraud.The same results were also carried out by (Lauwrens & Yanti, 2022) showing that opportunity has a significant effect on the likelihood of financial statement fraud.In contrast to the research conducted by (Inawati & Arief, 2022) shows that partially the nature of industry has no 93| Marketing Mix Analysis In Increasing Furniture MSMEs Sales Volume In Cirebon District effect on financial statement fraud.Based on this description, the following hypothesis is formulated: H2 : Opportunity has a positive effect on financial statement fraud

The Effect of Rationalization on Financial Statement Fraud
Based on research conducted by (Azizah & Reskino, 2023), (Rahma & Sari, 2023) shows that rationalization has no effect on the detection of fraudulent financial statements.In contrast to research conducted by (Handoko & Angelyca, 2023) showing that change in auditors affects fraudulent financial reporting.Research conducted by (Handayati, 2023) shows that rationalization has a positive effect on fraud.(Khamainy et al., 2022) showed that change in auditor has no predictive relevance to financial statement fraud.In line with research conducted by (Chantia, Guritno, & Sari, 2021) shows that rationalization does not have a significant effect on fraudulent financial statements.Meanwhile, research conducted by (Nugroho & Diyanty, 2022) shows that rationalization is proven to affect the occurrence of fraudulent financial statements.(Wicaksono & Suryandari, 2021) showed that change of auditors has no effect on fraudulent financial reports.Based on this description, the following hypothesis is formulated: H3 : Rationalization has a positive effect on financial statement fraud

The Effect of Competence on Financial Statement Fraud
Based on research conducted by (Azizah & Reskino, 2023), it shows that competence has no effect on the detection of fraudulent financial statements.In line with research conducted by (Handoko & Angelyca, 2023) shows that change in directors has no effect on fraudulent financial reporting.(Handayati, 2023) show that capability is detrimental to fraud.Research conducted by (Khamainy et al., 2022) shows that change in directors does not have predictive relevance to financial statement fraud.(Inawati & Arief, 2022) showed that change in directors has a negative impact.(Handayani et al., 2022) showed that the proxied capability with good corporate governance showed zero correlation.(Lauwrens & Yanti, 2022) showed that competence has a significant effect on the likelihood of financial statement fraud.In contrast to research conducted by (Mukaromah & Budiwitjaksono, 2021) shows that change of directors has no effect on fraudulent financial statements.Based on this description, the following hypothesis is formulated: H4 : Competence has a positive effect on financial statement fraud

The Effect of Arrogance on Financial Statement Fraud
Based on research conducted by (Azizah & Reskino, 2023), it shows that arrogance has a great influence on the detection of fraudulent financial statements.This is in line with research conducted by (Rahma & Sari, 2023) showing that ego or arrogance has an effect on financial statement fraud.(Handayati, 2023) showed that arrogance has a positive effect on fraud.Meanwhile, research conducted by Hakim et al (2023) shows that the number of CEO's pictures does not have a significant effect on fraudulent financial reports in non-cyclicals.The same research was also conducted by (Khamainy et al., 2022) showing that the number of CEO's pictures does not have predictive relevance to financial statement fraud.(Agung, Pranyanita, Mediatrix, & Sari, 2021) showed that CEO duality has no effect on financial statement fraud.Based on this description, the following hypothesis is formulated: H5 : Arrogance has a positive effect on financial statement fraud Ranny Ariany Djami, Murtanto |94 The Effect of Ignorance on Financial Statement Fraud A corporate management system called "good corporate governance" is a system developed to achieve these goals in terms of improving business performance and strengthening compliance with ethical standards and legal requirements (Rodriguez-Fernandez, 2016).Corporate governance refers to the company's efforts to do this in order to build a pattern of beneficial relationships between stakeholders by increasing the company's value through the financial security of its owners (Kesuma, Risanty, Mubarok, & Marisa, 2020).Therefore, one of the causes of people committing fraud because they do not know the situation in their company, this is important to reduce ignorance of superior corporate governance.Based on research conducted by (Handoko & Angelyca, 2023), it shows that corporate governance policies have no effect on fraudulent financial reporting.Based on this description, the following hypothesis is formulated: H6 : Ignorance has a positive effect on financial statement fraud

The Effect of Greed on Financial Statement Fraud
The greed variable is proxied with remuneration which is an incentive or a kind of encouragement that can be given to the board of directors so that they can carry out their duties in accordance with the provisions of the interests of shareholders.However, compensating directors opens the door to greed fraud (Handoko & Angelyca, 2023).Based on research conducted by (Handoko & Angelyca, 2023), it shows that remuneration has no effect on fraudulent financial reporting.(Majdi & Rahman, 2013) explain that companies limit executive compensation to improve business performance and also to control in the behavior of executive directors to prevent fraud.Based on this description, the following hypothesis is formulated: H7 : Greed has a positive effect on financial statement fraud

RESEARCH METHODOLOGY
This study is intended to find out the factors that affect fraud heptagon theory on financial statement fraud.The unit of analysis used in this study is mining sector companies listed on the Indonesia Stock Exchange for the 2018-2022 period.
The independent variables contained in this study include: The pressure variable is proxied with the external pressure which describes the entire obligation of the entity.The formula used in measuring external pressure is: The opportunity variable is proxied with ineffective monitoring which explains the ineffectiveness during the supervision process carried out by the board of commissioners and the audit committee in carrying out their duties and functions.The formula used in measuring opportunities is:

BDOUT = Number of Independent Commissioners
Total Board of Commissioners 95| Marketing Mix Analysis In Increasing Furniture MSMEs Sales Volume In Cirebon District

Rationalization
The rationalization variable is proxied by the total accrual using the formula, namely: Total Accrual = Income From Operating t -Cash Flow From Operating t Total Asset t

Competence
The competence variable is proxied by change of directors which is measured using a dummy variable, if there is a change of directors it is marked 1, but if it is not given a code of 0.

Arrogance
The arrogance variable is proxied by the frequent number of CEO's picture which is measured by looking at the number of CEO photos that appear in the entity's annual report.

Igronance
The ignorance variable is proxied with corporate governance policies which is measured by looking at if training provided to employees or directors between 2018 and 2022 is marked 1, but if it is not given a code of 0.

Greed
The greed variable is proxied with remuneration measured by measuring using a dummy variable, if there is a remuneration greater than the total average remuneration for the period 2018 -2022 at that time coded 1, but otherwise, coded 0. Source : Data processed, 2024

Panel Data Regression Analysis
The regression analysis of panel data in this study was used as a benchmark to obtain a regression coefficient whether the hypothesis that had been made would be accepted or rejected.In determining the regression analysis of panel data, it is necessary to carry out three approach models, namely (1) Common Effect, (2) Fixed Effect, and (3) Random Effect.Source : Data processed, 2024 By value p-value Of the seven independent variables, there is not a single variable that has a significant effect because the value of p-value > 0.05.Source : Data processed, 2024 By value p-value Of the seven independent variables, there are two variables that have a significant effect, namely Pressure and ignorance that has value p-value < 0.05, while opportunity, rationalization, competence, arroganceand greed is not significant because the value p-value > 0.05.3) Chow Test (Common Effect and Fixed Effect) Source : Data processed, 2024 Output Eviews It shows that Cross-section Chi-square 0.0036 is smaller than 0.05.The value means that the model Fixed Effect better compared to the model Common Effect.So from the test, Fixed Effect to be the best model in this research.Results from estimation using the fixed effect then the following equation is formed: FSF = 12.52867 -6.149462 (pressure) -1.864450 (opportunity) + 3.838563 (rationalization) -0.015721 (competence) -0.303192 (arrogance) -7.784534 (ignorance) + 0.257062 (greed)

2) Estimated Results with Fixed Effect Model
The value of the constant in the equation of 12.52867 shows that if all variables are considered to be worth 0, then the magnitude of the value Financial Statement Fraud is 97| Marketing Mix Analysis In Increasing Furniture MSMEs Sales Volume In Cirebon District 12.52867.Coefficient value Pressure negative 6.149462 means that every increase of 1 will decrease pressures of 6.149462 assuming the other variables are considered constant.Opportunity coefficient value negative 1.864450 means that every increase of 1 will decrease opportunity 1.864450 assuming other variables are considered constant.Coefficient value rationalization by 3.838563 means that every increase of 1 will increase rationalization 3.838563 assuming other variables are considered constant.Coefficient value competence negative 0.015721 means that every increase of 1 will decrease competence of 0.015721 assuming the other variables are considered constant.Coefficient value arrogance negative 0.303192 means that every increase of 1 will decrease arrogance by 0.303192 assuming the other variables are considered constant.Coefficient value ignorance negative 7.784534 means that every increase of 1 will decrease ignorance of 7.784534 assuming other variables are considered constant.Coefficient value greed 0.257062 means that every increase of 1 will increase greed of 0.257062 assuming the other variables are considered constant.Stress is a situation that makes a person feel compelled to commit fraud.Pressure can come from a variety of sources, including personal financial problems, work demands, unrealistic performance targets and a desire to maintain a certain lifestyle.According to TMbooks (2021), there is enormous pressure for management to meet the requirements or expectations of third parties due to the following: 1. Expectations of profitability levels or trends from investment analysts, significant creditors, or other external parties (especially aggressive and unrealistic ones), including expectations that management makes in messages on press releases or annual reports that are overly optimistic; 2. The need to obtain additional debt or capital financing to remain competitive, including financing research and development or large capital expenditures; 3. Marginal ability to meet the requirements of listing on the capital market, debt repayment, or other debt agreements.4. The detrimental impact of poor reporting of financial results on significant transaction delays, such as business combinations or contract awards.

Hypothesis Testing T Test Results
There is enormous pressure on management or individuals to achieve financial targets set by the party responsible for governance, including sales or profitability targets.Based on the regression analysis of the panel data used in this study , the pressure that is proxied with external pressure using the fixed effect model has a significant effect on financial statement fraud.This is seen from the profitability value of 0.01, which is smaller than the significant level of 0.05.

The Effect of Opportunity on Financial Statement Fraud
Opportunities arise when there are weaknesses in the internal control system of a business entity.The lack of clear and structured procedures and policies can make it easier for individuals or groups to carry out fraud.In situations where monitoring of the company's expenses is not done carefully, a management can feel there is an opportunity to misuse the company's funds for personal gain.In addition, a work environment that does not respect ethics and integrity can signal to employees that fraudulent actions are acceptable or will not be followed up seriously.According to TMbooks (2021), opportunities to commit fraud can occur such as: 1. Significant transactions with related parties that are not conducted in ordinary business or with related entities without being audited or audited by another public accounting firm; 2. Strong financial ability to dominate certain industry sectors that allow entities to dictate terms or conditions to suppliers or customers that lead to non-arm's length transactions; Putri Indah Lestari, Wardi, Tatang Basujata, Alip Rahman, Diky Dikrurahman |100 Based on the regression analysis of the panel data used in this study, the competence proxied by change of directors using the fixed effect model did not have a significant effect on financial statement fraud.This is seen from the profitability value of 0.97 greater than the significant level of 0.05.

The Effect of Arrogance on Financial Statement Fraud
Arrogance can occur when a person makes a moral excuse or justification for an act of cheating, assuming that it is just "part of the business" or "everyone is doing the same thing".Arrogance towards fraud creates an environment where an unethical environment can flourish unhindered and can undermine the integrity of the organization as a whole.(Rahmatullah, 2019) mentioned that there is another proxy of arrogance , namely the CEO politician which means that a CEO who is also a politician will have many connections that will foster arrogance or arrogance in a CEO so that it legalizes all means to cover up the fraud he commits and take advantage of his wide connections.
Based on the regression analysis of the panel data used in this study, arrogance proxied with frequent number of CEO's picture using a fixed effect model did not have a significant effect on financial statement fraud.This is seen from the profitability value of 0.41 greater than the significant level of 0.05.

The Effect of Ignorance on Financial Statement Fraud
Ignorance or neglect in the Great Dictionary of the Indonesian Language refers to looking down, not caring and not holding onto.An attitude or circumstance in which an organization or individual chooses to ignore or disregard policies that have been established to prevent fraud can occur when there is a failure to implement good corporate governance policies that are supposed to reduce the risk of fraud.In addition, an organizational culture that does not place integrity as a primary value and does not emphasize high business ethics can create an environment where fraud is considered acceptable or ignored.
Based on the regression analysis of the panel data used in this study, ignorance which is proxied with corporate governance policies using a fixed effect model has a significant effect on financial statement fraud.This is seen from the profitability value of 0.00 which is smaller than the significant level of 0.05.

The Effect of Greed on Financial Statement Fraud
Greed or greed refers to a strong drive or motivation to achieve personal gain, the need to satisfy the ego, to the detriment of others in a dishonest way.When greed affects an individual or organization in financial statements, it can lead to manipulative practices that aim to improve financial performance in an illegitimate or misleading manner.Greed can also be triggered by pressure from stakeholders such as investors, financial analysts or the board of directors to provide financial statements that meet or exceed expectations, regardless of the actual circumstances.
Based on the regression analysis of panel data used in this study, greed that is proxied with remuneration using a fixed effect model does not have a significant effect on financial statement fraud.This is seen from the profitability value of 0.59 greater than the significant level of 0.05.
101| Marketing Mix Analysis In Increasing Furniture MSMEs Sales Volume In Cirebon District

CONCLUSION
Based on the results of research and discussion on Fraud Heptagon Theory towards Financial Statement Fraud, it can be concluded that partially Pressure and ignorance have a significant effect on Financial Statement Fraud.While opportunity, rationalization, competence, arrogance and greed does not have a significant effect on Financial Statement Fraud.Simultaneously shows that pressure, opportunity, rationalization, competence, arrogance, ignorance and greed does not have a significant effect on Financial Statement Fraud.
The limitations in this study are: first, data on annual reports are obtained through observation results by searching for the name of each issuer and then comparing which reports have been audited and which have not been audited.Research in the mining sector has a tendency towards selection bias, generalization of results or difficulties in measuring complex and multi-dimensional variables so that it is necessary to make other measurements on Fraud Heptagon, especially in companies in Indonesia.Therefore, it is hoped that future researchers will be able to conduct research in other sectors, such as the government sector by using qualitative methods in the form of direct interviews with informants or conducting mixed method between qualitative and quantitative methods.This is recommended because many elements fraud which is difficult to measure if only using quantitative methods.
In addition, for potential investors It is necessary to look at the condition of the company's financial position first, before making an investment.This is done in order to obtain better profits and also to avoid irregularities stemming from fraud in the company's financial statements.And mining sector companies need to carry out better internal control procedures, so as to avoid financial stability, ineffective Monitoring and Collusion.

Figure 1
Figure 1Categories of Occupational Fraud Source : Association of Certified Fraud Examiners (ACFE), 2024 Based on the ACFE survey contained in the Report to The Nations 2024, cases of financial statement fraud that deliberately cause misrepresentation or material negligence in an organization's financial statements are a rare category with a percentage of 5% but cause the largest median loss of $766,000.In addition, from a case perspective, the mining sector (mining) is in first place with an average loss of $550,000 and 24 cases have occurred.One example of a case that occurred in the mining sector is a fraud case involving Vale SA, a large mining company in Brazil that faced allegations of manipulating financial statements after the Brumadinho dam disaster in 2019.Internal documents show that Vale classified dam 1 at the Corrego do Feijao mine as twice as likely to fail than the maximum level of risk that can be tolerated under the company's own dam safety policy.The previously unreported document is the first evidence that Vale has been concerned about the safety of the dam.This raises the question of why audits conducted around the same time actually ensure the stability of the dam.In addition, why did Vale not take precautions, such as moving the Company's canteen that was on the slopes.From the case, the investigation revealed that the company had hidden important information about the actual condition of the dam (News.Detik.com,2019).Most financial statement fraud scandals are one of the important reasons to be analyzed, in order to minimize financial statement fraud, and not add to state losses.The measuring tool used to detect financial statement fraud is the method popularized by Beneish in 1999.There are two methods used, namely, Beneish M-Score and F-Score.Beneish M-Score is a financial statement fraud prediction model, where the ratios contained in it have been proven to have the ability to predict financial statement fraud(Beneish, 1999).Meanwhile, the F-Score model is a development of M-Score which is made specifically to get a score directly without using an index.The difference between this study and the previous study lies in the independent variables where the previous researcher used the culture and religiosity variables in testing fraud heptagon theory while the researcher used the variables ignorance and greed.In addition, the research method used in the form of a questionnaire was disseminated to auditors in DKI Jakarta while the researcher used the mining sector listed on the Indonesia Stock Exchange as an empirical study in this study.
Source : Fraud Triangle Theory by Cressey, 1953

Capability Figure 3
Fraud Diamond TheorySource : Fraud Diamond Theory byWolfe & Hermanson, 2004 The next development of the theory is the Fraud Pentagon Theory proposed by Marks in 2012, an in-charge partner at Crowe Horwarth LLP.The fraud pentagon theory is a development of previous theories that originated from the fraud triangle theory by Cressey in 1953, then developed by Wolfe and Hermanson in 2004 into the fraud diamond theory.Fraud pentagon adds components in detecting fraud, namely competence and arrogance.

Figure 4
Figure 4 Fraud Pentagon Theory Source : Crowe's Fraud Pentagon Theory by Marks, 2012

Figure 5
Figure 5Fraud Hexagon Theory Source : Fraud Hexagon Theory by Vousinas, 2019 Fraud Heptagon Theory is an evolution of the theory fraud developed by(Yusof, 2016) in his dissertation entitled "Fraudulent Financial Reporting: An Application of Fraud Models to Malaysian Public Listed Companies".This theory explains that there are two o g a n c

Figure 6
Figure 6 Framework of Thought Source: Data processed, 2024 Hypothesis development Effect of Pressure on Financial Statement FraudBased on research conducted by(Handoko & Angelyca, 2023), it shows that pressure proxied with financial pressure has no effect on fraudulent financial reporting.Research conducted by(Rahma & Sari, 2023) shows that financial stability has an effect on financial statement fraud, while external pressure and financial targets have no effect on financial statement fraud.Research conducted by(Handayati, 2023)  shows that stimulus has a positive effect on fraud.In line with research conducted byHakim et al  (2023), it shows that pressure proxied by government projects has a significant effect on fraudulent financial statements , while financial target and financial stability do not have a significant effect on fraudulent financial reports in non-cyclicals.(Handayani,Evana, &  Prasetyo, 2022)  showed that external pressure is positively correlated with fraudulent financial reports.Based on this description, the following hypothesis is formulated: H1 : Pressure has a positive effect on financial statement fraudThe Effect of Opportunity on Financial Statement FraudBased on research conducted by(Azizah & Reskino, 2023), it shows that opportunity has no effect on the detection of fraudulent financial statements.In line with the research conducted by(Rahma & Sari, 2023), it shows that the nature of industry and effective monitoring have no effect on financial statement fraud.Research conducted by(Handayati, 2023)  shows that opportunity has a positive effect on fraud.Research conducted by(Khamainy et al., 2022)  shows that the nature of industry as a proxy of opportunity has predictive relevance to financial statement fraud.The same results were also carried out by(Lauwrens & Yanti, 2022)  showing that opportunity has a significant effect on the likelihood of financial statement fraud.In contrast to the research conducted by(Inawati & Arief, 2022)  shows that partially the nature of industry has no

Table 6 Fixed Effect Model Estimation Results Variable Coefficient Std. Error t-Statistic
Processed Data, 2024 Table7shows that pressure, opportunity, rationalization, competence, arrogance, ignorance and greed towards Financial Statement Fraud measured using F-Score has a significant value of 0.062984 which is greater than the significant level of 0.05.Based on this, it can be concluded that pressure, opportunity, rationalization, competence, Putri Indah Lestari, Wardi, Tatang Basujata, Alip Rahman, Diky Dikrurahman |98arrogance, ignorance and greed does not have a significant effect simultaneously on Financial Statement Fraud, in other words H8 is rejected.Based on the explanation above, Adjusted R-squared of 0.110573.meaning 0.11 Financial Statement Fraud Influenced by pressure, opportunity, rationalization, competence, arrogance, ignorance and greed.The remaining 0.89 was influenced by other variables that were not included in the research model.Discussion