The Psychology Behind Financial Fraud: Unmasking Motives and Warning Signs
- Post by: airjournals
- August 28, 2023
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Prof. Egiyi, Modesta Amaka1 and James Daniel Chindengwike2
1Department of Accountancy, Godfrey Okoye University, Enugu
2Department of Finance, Accounting and Economics, St. John’s University of Tanzania
| Abstract This study delves into the intricate psychology behind financial fraud, unraveling the motives driving unethical behavior. Analyzing cognitive biases, personality traits, and moral disengagement mechanisms, it unveils the decision-making processes that enable fraud. Real-world cases like Enron and Bernie Madoff illustrate how psychology intersects with financial motives, creating conditions ripe for fraud. The study outlines warning signs, from information concealment to unexplained affluence. Ethical and legal consequences are explored, highlighting dilemmas faced by professionals like auditors and regulators. Emphasizing ethical organizational culture and whistleblower protection, the study proposes restorative justice and rehabilitation for societal healing. It calls for ongoing collaboration between psychology and finance to enhance prevention and detection strategies. This study equips stakeholders with insights into the psychology of financial fraud, contributing to a more resilient financial landscape that upholds ethics, transparency, and counters the pervasive threat of fraud. |
| Keywords | Financial Fraud; Prevention Strategies; Ethical Implications; Warning Signs |
| Citation | Egiyi, M. A. & Chindengwike, J. D. (2023). The Psychology Behind Financial *Fraud: Unmasking Motives and Warning Signs. Contemporary Journal of Psychology and Behavioral Science, 4(1), 16-24, https://doi.org/10.5281/zenodo.8287913 |
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