Rethinking Rationalization: Why the Fraud Triangle's Third Leg Needs a Cultural Shift

The traditional Fraud Triangle often misattributes rationalization solely to individual psychology, overlooking the profound influence of organizational culture. This article argues that rationalization is frequently an institutional construct, pre-existing and readily available for individuals to adopt, rather than something they invent under duress. For audit and assurance professionals, this distinction is critical as it necessitates a shift from individual-focused controls and ethics training to a deeper examination of leadership modeling, normalized exceptions, and the unwritten rules that shape an organization's ethical landscape.