Factors Affecting Financial Fraudulent Intention in the Digital Age

Yeh, Chia Yin (2025) Factors Affecting Financial Fraudulent Intention in the Digital Age. Masters thesis, Tunku Abdul Rahman University of Management and Technology.

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Abstract

In today’s digital financial environment, fraudulent behaviours are increasingly shaped by psychological and cognitive mechanisms rather than just opportunity or pressure. This study investigates the influence of selfishness and rationalization on fraudulent intention, with moral justification as a mediating variable. Grounded in the Fraud Triangle Theory and the Theory of Planned Behaviour, the research explores how individuals justify unethical actions through internal moral reframing, ultimately shaping their intent to engage in fraud. A quantitative, cross-sectional research design was adopted, and primary data were collected from 409 respondents through an online self-administered questionnaire. The study employed Partial Least Squares Structural Equation Modelling (PLS-SEM) for analysis, incorporating both measurement and structural model assessments. The findings demonstrate significant direct relationships between selfishness, rationalization, and fraudulent intention, as well as significant indirect effects through moral justification. Moral justification was found to play a crucial mediating role, reinforcing how individuals internally neutralize ethical concerns to justify fraudulent behaviour. Importance-Performance Map Analysis (IPMA) further identified moral justification and rationalization as high-impact, low-performance variables—key targets for fraud mitigation. This research contributes theoretically by extending the understanding of moral disengagement in fraud-related behaviour and empirically by confirming mediation pathways. Managerially, the findings emphasize the importance of targeting cognitive and dispositional traits in ethics training, internal controls, and fraud prevention strategies. Limitations of the study include the lack of respondents with actual fraud experience and the absence of moderating variables such as religiosity and perceived risk of detection. Future research should address these gaps by incorporating experience-based and moderating variables to improve predictive power. Overall, the study provides meaningful insights into the psychological antecedents of fraud, offering a foundation for both academic research and practical intervention in fraud prevention within the digital age. Keywords: Fraudulent Intention, Moral Justification, Rationalization, Selfishness, Digital Financial Ecosystem