Playing the Ponies: A $5 Million Embezzlement Case

Testing of Fraud Diamond Theory Based on Local Wisdom on Fraud Behavior

“…Fraud triangle theory consists of three elements: (a) perceived pressure, (b) opportunity, and (c) rationalization. Based on this theory, fraud is impossible without these three elements, and the severity of fraud depends on the strength of each element (Howe and Malgwi, 2006). Wolfe and Hermanson (2004) introduced an extension of fraud triangle theory by adding an additional element, namely capacity, so this theory was later called fraud diamond theory.…”

“…Fraud behavior usually arises from the pressure obtained by employees in an organization. Albrecht, Hill, et al (2006), Albrecht, Turnbull, Zhang, and Skousen (2010), and Howe and Malgwi (2006) argue that fraud behavior is caused by economic pressures such as greed, lifestyle, large expenses or personal debt, loan problems, financial losses and inability to meet financial plans;…”

Challenges to the fraud triangle: Questions on its usefulness

“…The literature on the pressure to commit occupational fraud can be broadly classified into financial pressures and non-financial pressures (AIC & PwC, 2003;Fitzsimons, 2009;Albrecht et al, 2012). Non-financial pressures can be further categorized as (1) work-related pressure (Hollinger & Clark, 1983;Baucus, 1994;Holton, 2009;Peterson & Gibson, 2003;Bartlett et al, 2004); (2) pressure associated with gambling and drug addiction (Sakurai & Smith, 2003;Howe & Malgwi, 2006;Kelly & Hartley, 2010);and (3) pressure associated with individuals who want to make a statement by living luxurious lifestyles (Rezaee, 2005;Dellaportas, 2013;.…”

“…Easy access to online gambling including poker and gaming machines, casinos and lotto-style games has contributed to a substantial growth in the gambling industry (Sakurai & Smith, 2003;Howe & Malgwi, 2006;Kelly & Hartley, 2010).…”

Beyond the Fraud Triangle; Why People Engage in Pecuniary Crimes?

“…Non-financial pressure can be further classified into (a) work-related pressure (Peterson and Gibson, 2003;Holton, 2009;and Bartlett et al, 2004); (b) pressure related to people who want to live on extravagant lifestyles/ living beyond one's means (Rezaee, 2005;Neu et al, 2013;Dellaportas, 2014); and (c) pressure related to drug addiction and gambling (Kelly and Hartley, 2010;Howe and Malgwi, 2006). In organization context, financial strain, namely a failed market investments or distress business, whether it ascends from misfortune or recklessness, is the catalyst which mobilizes numerous individual to perpetrate fraud (Cressey, 1950).…”