Rationalization
Definition
The internal justification that allows a person to commit fraud while maintaining a self-image as an honest individual. Common forms include 'I was only borrowing it', 'I was underpaid anyway', or 'the company can afford it'.
Related terms
- Control Environment
- The first and foundational component of the COSO framework. It encompasses the board's oversight, management's philosophy and operating style, organisational structure, commitment...
- 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,...
- Management Override
- The circumvention of established internal controls by members of senior management. A key fraud risk in any organisation because those who set...
- 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...
Explained in
- The Fraud Triangle and Cressey's ModelThe internal justification that allows a person to commit fraud while maintaining a self-image as an honest individual. Common forms include 'I was only borrow...