Audit standards around the world describe three factors, known together as the fraud triangle that purportedly predict the likelihood of fraudulent financial reporting (IAASB, 2009 PCAOB, 2005). The first two factors, opportunity and incentive/pressure, are largely accepted as being associated with fraud (Erickson, Hanlon, & Maydew, 2004; Graham, Harvey, & Rajgopal
2005; Wells, 2001), whereas the third factor, attitude/rationalization, remains a relative mystery (Hogan, Rezaee, Riley, & Velury, 2008; Wells, 2004). I conducted an experiment in which participants were provided the opportunity and motivation to misreport, in order to explore attitude and rationalization in greater detail. As expected, I found that participants whose attitude favors misreporting and individuals who are higher in Machiavellianism ar bot more likely to misreport; and participants who misreport experience negative emotions affect). Of concern, however, is that higher Machiavellians who misreport feel significantly less guilt than others who misreport. When I changed the experimental setting and aske participants to think about common rationalizations they may use, in an attempt to reduce rationalizing before they made their reporting decision, significantly fewer participants misreported; while those who still misreported rationalized to an even greater extent Implications for future research and fraud detection and prevention are discusse