The Fraud Triangle
The fraud triangle is a model for explaining the factors that cause someone to commit occupational fraud. It consists of three components which, together, lead to fraudulent behavior:
1. Perceived unshareable financial need
2. Perceived opportunity
The fraud triangle originated from Donald Cressey’s hypothesis:
Trusted persons become trust violators when they conceive of themselves as having a financial problem which is non-shareable, are aware this problem can be secretly resolved by violation of the position of financial trust, and are able to apply to their own conduct in that situation verbalizations which enable them to adjust their conceptions of themselves as trusted persons with their conceptions of themselves as users of the entrusted funds or property.1
1Donald R. Cressey, Other People’s Money (Montclair: Patterson Smith, 1973) p. 30.
See also my post on the MCI Worldcom scandal, Integrity Ebbs by Inches.