THE “DEATH” OF FRAUD THEORY IN THE VIEW OF ISLAMIC PERSPECTIVE

Abstract

Conventional fraud theories, from the Fraud Triangle to its successive evolutions, have reached a saturation point in explaining the opportunistic behavior of modern individuals. Despite increasingly sophisticated audit mechanisms and regulatory frameworks, financial fraud scandals persist, indicating a fundamental gap in the prevailing paradigm. This study proposes the proposition “The Death of Fraud Theory” through an Integrative Literature Review (ILR) that synthesizes findings across accounting, neuropsychology, and Islamic theology. The study argues that conventional fraud theory loses its predictive power when applied to individuals who have reached moral and spiritual maturity, particularly at the age threshold of 40 years. At this phase, character crystallization—supported by neuropsychological evidence of brain maturity in moral judgment areas (Wright, 2015) and corroborated by QS. Al-Ahqaf: 15—renders the variables of pressure, opportunity, and rationalization effectively inoperative. The study further introduces the Equilibrium of Intention model, in which the internalization of transcendental values, specifically Wara’ (mindful restraint) and Muraqabah (awareness of divine supervision), functions as a cognitive filter that permanently deactivates the moral justification mechanism underlying fraudulent behavior. Empirical validation from Simbolon (2025) on Indonesian provincial governance strengthens this proposition. This study contributes a paradigm shift from mechanistic- detective control to transcendental-preventive control, offering a novel multidisciplinary framework for fraud mitigation rooted in individual moral independence.