A New Interpretation of the Fraud Triangle: The Lens of Social Action Theory

Classical Fraud Triangle theory overlooks the dynamic interplay between its elements. We combine Social Action Theory to construct a hierarchical SAT-FT framework, reinterpreting corporate fraud as a process spanning motivational, situational, and normative layers. Analyzing 5,703 Chinese listed companies (2018–2025) via a moderation-moderation model, we find that debt pressure drives fraudulent behavior, a relationship intensified by management shareholding but mitigated by state shareholding. These findings extend FT from static psychological models to a social-institutional perspective, providing critical guidance for enhancing corporate governance and regulatory frameworks.