Preventing Employee Fraud Through Ethical Culture: Addressing Rationalisation in the Fraud Triangle
DOI:
https://doi.org/10.51137/wrp.ijarbm.872Keywords:
Ethical Culture, Fraud Triangle, Rationalisation, Employee Fraud, Occupational Fraud.Abstract
Employee fraud represents a persistent challenge for organisations worldwide, with significant financial and reputational consequences. This article synthesises findings from 25 peer-reviewed studies to examine how ethical culture functions as a primary mechanism for preventing occupational fraud, with particular attention to disrupting the rationalisation element of the fraud triangle. Through a systematic analysis of empirical research published between 2022 and 2025, this study identifies the mechanisms by which ethical culture undermines employees' ability to justify fraudulent behaviour. The reviewed studies suggest that comprehensive ethical culture interventions, including leadership commitment, ethics training, whistleblowing systems, and accountability structures, are associated with reductions in reported fraud incidence by addressing all three components of the fraud triangle, particularly rationalisation. This article contributes to fraud prevention literature by providing an integrated framework, combining Fraud Triangle Theory, Ethical Climate Theory, and Social Learning Theory, with a specific focus on rationalisation and on organisational moral disengagement as a mediating mechanism, for understanding how ethical culture interrupts the psychological and organisational processes that enable employee fraud. Practical implications for organisations seeking to strengthen their anti-fraud cultural infrastructure are discussed.
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Copyright (c) 2026 Sibonise Mabengwana, Luvuko Nkwenkwe (Author)
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