Fraud Psychology: 3 Elements That Always Present in Every Fraud Case


Fraud Psychology: 3 Elements That Always Present in Every Fraud Case

We are often surprised by the fraudsters. Who would have thought colleagues or partners who had been good, trustworthy, not have a criminal record, were able to commit fraud that harms many parties. The question then arises “why did they do that?”

For decades, forensic accountants and fraud examiners questioned the same question. Over the years researchers have also conducted many studies to gain a deeper understanding of fraudulent behavior. Then in the 1950s a criminologist and sociologist, Donald R. Cressey developed a famous concept called ‘the triangle fraud.

This concept explains the three elements that are always present in every case of fraud: motivation, opportunity, and rationalization.

1. Motivation

There is always a ‘need’ that urges the fraudsters to conduct fraudulent acts. It could be due to the financial crash, want a luxurious lifestyle, or debt. Motivation does not always relate to material things. Drug abuse or high pressure on job performance and the need to cover up someone’s poor performance can be a motivation.

2. Opportunities

Where there is a need, the fraudsters always look for opportunities to carry out their intentions. Office or workplace becomes always the target and the most likely place for the perpetrators of cheating to do the action. Not only cheating in the form of nominal, but also theft of valuable data that they can sell.

3. Rationalization

The wrong thing is a bit much to make the conscience disturbed. The fraudsters feel it and to feel better they make a justification for themselves that what they are doing is appropriate. For example, “I’m just taking a little, this big company will not lose money”, “Just this once”, “I have the right to do this because I should get my rights”.

Fraud is the root that hampers company’s development. By studying the concept of ‘triangle fraud’ companies can do fraud prevention by focusing on reducing the opportunity, for example creating a system that limits access to corporate functional areas and building anti-fraud culture.






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