FRAUD HEXAGON: DETECTION OF FRAUD IN ENTREPRENEURIAL FIRMS
Abstract
Fraudulent conduct in entrepreneurial firms constitutes one of the most consequential yet underexplored dimensions of corporate governance and financial crime in Nigeria. This paper systematically applies the Fraud Hexagon model, a six-element theoretical framework comprising pressure, opportunity, rationalisation, capacity, arrogance, and collusion, to the detection of fraud in Nigerian entrepreneurial firms. Tracing the theoretical lineage from the Fraud Triangle through the Fraud Diamond and the Fraud Pentagon, the paper situates the Hexagon as the most comprehensive fraud explanation model currently available and examines its applicability to the governance-constrained environment of Nigerian entrepreneurial organisations.Drawing on current empirical literature, including evidence from 2024 to 2026, the paper analyses how each Hexagon element manifests distinctively within Nigerian entrepreneurial governance structures and cultural dynamics. The roles and limitations of the Financial Reporting Council of Nigeria (FRCN), the Economic and Financial Crimes Commission (EFCC), and co-regulatory bodies are critically assessed. Recent evidence is integrated to provide a current and contextually grounded analysis. Key challenges, including regulatory gaps, governance informality, forensic accounting capacity deficits, and cultural barriers to fraud reporting, are examined within a Hexagon-informed analytical framework. The paper concludes with a tiered policy framework and practical recommendations for regulators, entrepreneurs, investors, auditors, and policymakers.
This article is available as a PDF download
Published in BUSINESS AND FINANCE JOURNAL
ISSN: 988-47876
This article appears in our peer-reviewed academic journal
View JournalRelated Articles
Explore similar research in our collection
CAPITAL STRUCTURE AND SHAREHOLDERS’ VALUE OF DEPOSIT MONEY BANKS IN NIGERIA
MGBATAOGU, IFEANYI S. (PhD), MURRAY, EBIKE M. (PHD), THANKGOD, UBULOM D. (DBA)
Jun 27, 2026
The study sets out to empirically x-ray the nature of relationship between firms’ capital structur...
View ArticleGREEN LENDING AND RETURN ON ASSETS OF LISTED DEPOSIT MONEY BANKS IN NIGERIAN
MARY OLUWABUKOLA OLUWAFISOYE, MOFOLUWASO IYABODE OJEDELE (PhD), SAMUEL ADEBISI ADEWOYIN, FELICIA OLUFUNKE FANIRAN
Jun 24, 2026
In recent years, the importance of green lending has risen in the context of sustainable financing, ...
View ArticleWORKING CAPITAL MANAGEMENT AND FINANCIAL PERFORMANCE OF EMERGING ECONOMIES: EVIDENCE FROM NIGERIA
KAZEEM ALANI ZAKARIYAH, JANET TEMILADE MOGAJI, FATAI BUSAYO YEKEEN, MUIDEEN RAIFU
Jun 9, 2026
This study evaluated the influence of working capital management on financial performance of publicl...
View Article