The role of dark triad leadership in manipulative accounting, accountability mechanism and economic inequality reinforcement: a theoretical approach

What the paper says

Purpose This study aims to present the theoretical framework of how dark triad personality traits at micro level can reinforce the macro-level economic inequality through the mediating role of meso-level manipulative accounting practices. It also clarifies the moderating role of external accountability mechanisms between manipulative accounting practices and economic inequality. Design/methodology/approach Adopting a theoretical approach, this study integrates trait theory of leadership, agency theory, stewardship theory and institutional theory to develop a theoretical framework explaining the mechanisms through which unethical manipulative accounting behaviour emerges, persists or is mitigated. Findings This study identifies that dark triad leaders exploit financial reporting systems for personal or organizational gain at meso level, exacerbating economic inequalities at broader macro level. Strong external (formal and informal) accountability mechanisms can counteract manipulative accounting practices. However, weak governance allows unethical financial behaviours to become institutionalized, reinforcing economic inequality at macro level. Practical implications The findings underscore the need for stricter financial regulations, independent audits and ethical leadership development programmes to prevent corporate fraud. This study’s insights can inform policymakers, regulators and corporate leaders seeking to mitigate financial misconduct and its socio-economic consequences. Originality/value This study offers a multidimensional perspective and synthesizes psychological, financial and institutional perspectives for developing micro–meso–macro level framework. By integrating leadership traits into financial governance literature, it provides a novel understanding of how manipulative accounting practices persists at meso level transfer the influence of dark triad leaders at micro level to reinforce the economic inequality at macro level.