The fraud pentagon theory and Machiavellianism: experimental study of direct and moderating effects

This study aims to examine the predictive power of the fraud pentagon theory (FPT) and Machiavellianism while explaining the likelihood of committing fraud in corporate social responsibility (CSR) fund distribution framing. The research addresses a significant gap in the literature concerning the complex nature of explanatory variables in the field of corporate fraud on the individual level. A laboratory experiment (n = 287) with a 2 x 2 factorial design was conducted in two countries, manipulating pressure and opportunity while assessing rationalisation, capability, arrogance and Machiavellianism via questionnaire. Multiple linear regression and moderation analyses were used to test direct and interaction effects on fraud, operationalised as money retained by participants. Pressure, opportunity and rationalisation significantly increased the likelihood of fraud. Capability and arrogance showed weaker or inconsistent direct effects. Machiavellianism did not directly predict fraud but significantly moderated the effects of pressure, rationalisation and capability. Further research should replicate findings in professional settings and refine the measurement of capability. Findings underscore the importance of tailored internal controls and ethical training that account for both situational pressures and individual personality traits. To the best of the authors’ knowledge, this is among the first empirical studies to test the full FPT model in a CSR context using experimental methodology. It introduces Machiavellianism as a moderator of fraud-related behaviours, extending the explanatory power and offering a nuanced understanding of how personality traits interact with situational variables.