Objective: In one hand, based on one of the fundamental assumptions of agency theory, the external organizational pressure imposed on managers declines their potential moral hazard but on the other hand, the cognitive evaluation theory argument is that strong expectations of managers due to the strategic organizational leadership mechanisms, while limiting their sense of autonomy, decline their individual motivation for conducting business and potentially lead to financial fraud. Regarding the mentioned contradictory arguments, this research aims to examine the relationship between corporate governance and financial fraud strategies, focusing on cognitive assessment of representation prescriptions. Methods: In this research external corporate governance mechanisms are measured by using dedicated institutional ownership and loan lender power. Two research hypotheses were analyzed using the data of 128 firms listed in the Tehran Stock Exchange during the period from 2012 to 2017 (include 768 firm-year observation) as well as using logistic regression. Results: The results indicated that the proprietary ownership and lenders’ ؛ power as corporate organizational mechanisms of management have a positive and significant effect on the probability of financial fraud. In other words, the external organizational pressure from owners and lenders maximizes the risk of financial fraud among managers Conclusion: When executives are encountered with a rigorous outsourcing control, more likely they would engage in fraudulent behaviors. This finding is in the opposite of the result which is expected by the managers' opportunistic activities, in accordance to the agency theory of the operation of external organizational controls.