Self-regarding Disposition as a Fraud Risk-factor and its Relationship with Narcissism

Abstract

Following the lead from an interactionist fraud model, we examine whether self-regarding (SR) disposition is positively associated with vulnerability to indulge in a temptation, which could lead to fraud. This study attempts to test this link, which is central to a recently developed disposition-based fraud model (DFM). Moreover, dispositional traits could in some ways be comparable to narcissistic traits, since broadly, both are measures of personality traits. Therefore, we examine if our finding concerning SR disposition is embodied in narcissistic traits. Our descriptive study found that SR disposition is positively correlated to vulnerability to temptation, suggesting that the DFM's link from the human disposition to vulnerability to temptation appears valid. However, we found no association between SR disposition and narcissism. Upon further examination at the subscale level of narcissism, we found maladaptive entitlement/exploitativeness scale is positively correlated with SR disposition and vulnerability to temptation, while the adaptive dimension, leadership/authority, is negatively correlated with SR disposition. The study provides preliminary evidence that SR disposition, due to its vulnerability to temptation, could lead to financial fraud. Implications of the findings and suggestions for further research are offered.