Fraud triangle
Definition
A model, developed by criminologist Donald Cressey, proposing that occupational fraud requires three converging conditions: pressure (financial need or incentive), opportunity (a control weakness), and rationalisation (a mental justification by the perpetrator).
Related terms
- Predication
- The reasonable basis that justifies opening a fraud examination. The ACFE holds that no examination should begin without adequate predication, meaning a...
- Asset misappropriation
- The largest Fraud Tree branch, covering schemes in which an employee steals or misuses the organisation's assets. Subcategories include cash schemes (skimming,...
- Forensic accounting
- The application of accounting, auditing, and investigative skills to matters likely to be disputed in a legal or regulatory forum. The word...
- Forensic audit
- An examination of an organisation's financial records and systems conducted specifically to gather evidence for legal proceedings. Distinguished from a regular audit...
- Fraud diamond
- Wolfe and Hermanson's 2004 extension of the fraud triangle that adds capability as a fourth condition. The model holds that pressure, opportunity,...
- Fraud examination
- The process of resolving an allegation of fraud, from initial fact-finding through evidence collection to a conclusion about what happened and who...
- Non-shareable financial problem
- Cressey's original term for the pressure element. The problem need not be objectively severe; what matters is that the perpetrator perceives it...
- Occupational fraud
- The ACFE defines occupational fraud as the use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the...
- Rationalisation
- In the context of the fraud triangle, the mental justification a perpetrator uses to excuse fraudulent conduct. In interviewing, rationalisation is used...
Explained in these topics
- Forensic Auditing: Definition and ScopeA model, developed by criminologist Donald Cressey, proposing that occupational fraud requires three converging conditions: pressure (financial need or incenti...
- The Fraud Triangle: Pressure, Opportunity, and RationalisationCressey's three-element model of occupational fraud causation: perceived non-shareable financial pressure, perceived opportunity to commit and conceal the act,...