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Understanding fraud risk: how legal ambiguity, work pressure, and rationality shape fraudulent behavior

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Fraud risk is significantly influenced by legal ambiguity, rationalization, and work pressure, affecting integrity and stability.
Rationalization mediates the link between legal ambiguity and fraud, enhancing the likelihood of fraudulent behavior.
Data from 333 managers of microfinance institutions in Central Java, Indonesia, were analyzed using SEM-PLS methodology.
Findings highlight the importance of enhancing regulatory frameworks to mitigate fraud and improve organizational ethics.

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Research analyzes the effects of legal ambiguity and rationalization on fraud behaviors, suggesting implications for risk management.

Pebruary et al. (2025) studied this question.

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