Fraud Triangle Theory: Calling for New Factors

Abstract

The famous financial scandal of Enron, WorldCom and 1 Malaysia Development Berhad has harmed the auditor’s reputation as the protector of shareholders’ rights. Auditors have done their part by conducting systematic audit procedures and “What Could Go Wrong” analysis in assessing the possible risk area to assist fraud detection in the client’s financial matters. However, fraud cases never seem to decline. Regardless of any safeguarding measures established, fraud incidents can just occur and be worsened by economic downturn and prolonged inflation especially after the pandemic ends. Additionally, the characteristic of the modern business environment, technology sophistication and new generation traits had challenged Cressey Fraud Triangle Theory on its validity and relevancy. Therefore, associating all these possible challenges into consideration, this study aims to review prior literature related to the evolution of Cressey fraud theory to propose a new insight in considering relevant motivation factors that drive fraud penetrations. From the review, the study discovered the need for a detailed evaluation and research on the essential fraud element in constructing an all-rounded fraud prevention mechanism.

The impact of forensic accounting on combating the financial fraud an exploratory study of the opinions of a sample of accountants in commercial banks in Basra

“…It can be said that Fraud includes various devious methods that involve deception and lying that lead to harm to others. It is also known as (seizing the money of others without right through the use of deception and lying) (Awang et al, 2020) [8] .…”

Challenges in and Opportunities for Developing Digital Entrepreneurs Among Vocational Students

“…Given the ubiquity of social media and the significant amount of time individuals spend online, leveraging these platforms for market research is highly recommended. The contemporary digital audience is prone to sharing feedback and discussing product-related experiences online, providing a rich source of information for entrepreneurs [29]. Thus, digital entrepreneurs can capitalize on this wealth of publicly available data to refine their business propositions and attract customers more efficiently.…”

Explaining the alienation of megaproject environmental responsibility behavior: a fuzzy set qualitative comparative analysis study in China

“…Fraud triangle theory has not only been used to study the problem of fraud (Awang et al. , 2020) but also has been widely used to analyze the causes of various opportunistic behaviors such as CEO wrongdoing (Schnatterly et al.…”

“…Fraud triangle theory has not only been used to study the problem of fraud (Awang et al, 2020) but also has been widely used to analyze the causes of various opportunistic behaviors such as CEO wrongdoing (Schnatterly et al, 2018), greenwashing (Kurpierz and Smith, 2020) and corruption in the construction industry (Bowen et al, 2012). Existing studies indicate the appropriateness of applying the fraud triangle theory to the study of opportunistic behavior in various fields.…”