Attitude, Machiavellianism and the Rationalization of Misreporting

49 Pages Posted: 14 Aug 2008 Last revised: 30 May 2012

See all articles by Pamela R. Murphy

Pamela R. Murphy

Queen's University - Smith School of Business; Queen's University

Date Written: April 17, 2012


Audit standards around the world describe three factors, known together as the fraud triangle, that purportedly predict the likelihood of fraudulent financial reporting (IAASB, 2009; PCAOB, 2005). The first two factors, opportunity and incentive/pressure, are largely accepted as being associated with fraud (Erickson et al., 2004; Graham et al., 2005; Wells, 2001), whereas the third factor, attitude/rationalization, remains a relative mystery (Hogan et al., 2008; Wells, 2004). I conducted an experiment in which participants were provided the opportunity and motivation to misreport, in order to explore attitude and rationalization in greater detail. As expected, I found that participants whose attitude favors misreporting and individuals who are higher in Machiavellianism are both more likely to misreport; and participants who misreport experience negative emotions (affect). Of concern, however, is that higher Machiavellians who misreport feel significantly less guilt than others who misreport. When I changed the experimental setting and asked participants to think about common rationalizations they may use, in an attempt to reduce rationalizing before they made their reporting decision, significantly fewer participants misreported; while those who still misreported rationalized to an even greater extent. Implications for future research and fraud detection and prevention are discussed.

Keywords: Machiavellianism, misreporting, fraud triangle, rationalization, negative affect, guilt

JEL Classification: M49, C91, M41, M43

Suggested Citation

Murphy, Pamela R., Attitude, Machiavellianism and the Rationalization of Misreporting (April 17, 2012). Queen's School of Business Research Paper No. 01-08. Available at SSRN: or

Pamela R. Murphy (Contact Author)

Queen's University - Smith School of Business ( email )

Smith School of Business - Queen's University
143 Union Street
Kingston, Ontario K7L 3N6

Queen's University ( email )

Kingston, Ontario K7L 3N6
6135333260 (Phone)

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