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Apr 1, 2016 · This article revisits the Fraud Triangle, an explanatory framework for financial fraud, originally developed by the American criminologist Donald Cressey from his interviews with embezzlers.
Aug 25, 2021 · triangle theory developedby Donald R. Cressey (1950) which is the most traditional theory to detect a fraud.
- 25 August 2021
- 25 August 2021
- 1318-1328
Jan 15, 2020 · The fraud triangle framework, popularized by Donald Cressey and W. Steve Albrecht, has been used to explain financial crimes since the 1940s. The theory includes that workplace financial crime and fraud occurs only when an offender has sufficient opportunity, pressure and rationalization to commit the crime.
- Emily M. Homer
- 2019
- What Is Fraud?
- The Fraud Triangle – Opportunity
- The Fraud Triangle – Incentive
- The Fraud Triangle – Rationalization
- Related Readings
The fraud triangle is used to explain the reason behind a fraud. However, what exactly is fraud? Fraud refers to a deception that is intentional and caused by an employee or organizationfor personal gain. In other words, fraud is a deceitful activity used to gain an advantage or generate an illegal profit. Also, the illegal act benefits the perpetr...
Opportunity refers to circumstances that allow fraud to occur. In the fraud triangle, it is the only component that a company exercises complete control over. Examples that provide opportunities for committing fraud include:
Incentive, alternatively called pressure, refers to an employee’s mindset towards committing fraud. Examples of things that provide incentives for committing fraud include:
Rationalization refers to an individual’s justification for committing fraud. Examples of common rationalizations that fraud committers use include:
Thank you for reading CFI’s guide to Fraud Triangle. To keep learning and developing your knowledge base, please explore the additional relevant CFI resources below: 1. Audit Materiality 2. Cash Larceny 3. Forensic Accounting 4. Selling Away 5. See all accounting resources
Apr 11, 2020 · As per the fraud triangle, typical corporate fraud perpetrators experience a non-shareable financial pressure such as the need to meet earnings target and obtaining financing at the lowest possible cost. Combined with pressures and rationalization, an otherwise good individual commits fraud.
- Naman Desai
- 2020
Jun 2, 2021 · Two of the three motivational factors identified by Cressey (1953) were developed from the earlier work of Svend Riemer (1941), who it is suggested should have equal billing with Donald Cressey for the concepts that led to the creation of the Fraud Triangle.
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Jun 1, 2018 · Cressey’s theory focused on the individual and identified improving organizational internal control measures as the deterrent for preventing fraud. The basic assumption of Cressey’s Fraud triangle is that for people to commit fraud, the three “elements” of the triangle need to be present.
