Blog 7 - Profiling Fraudsters

I somewhat agree with the view that the Fraud Triangle addresses both why fraud occurs, and why individuals turn to fraud, however I do think there are some grey areas that need to be addressed. Why? Mainly because the Fraud Triangle fails to really touch on organizational sub groups, nor does it touch on the aspect of bribery or corruption. What the Fraud Triangle does explore is the three recipes for fraud: opportunity, pressure, and rationalization (IACPA, 2009). 

The “pressure” side of the triangle can be compared to and webbed with the General Strain Theory (GST), which outlines that emotions like anger (which create pressure for crime) are increased by strains or stressors (Agnew, 2011). For example, if someone were to be very tight for money and had a family to care for, that type of pressure might encourage an individual to commit fraud.

Differential Association, on the other hand, is wholly centralised on the idea of the power of social influences and learning experiences (Short, 1957). That is, “the conditions which are said to cause crime should be present when crime is present, and they should be absent when crime is absent. It is a notion of differential social organizations, rather than a lack of social organization.

I suppose how this ties in with the fraud triangle is that, having social influences increases every side of the triangle in some way. There may be increased pressure, an increased opportunity to commit crime or even an increase in rationalization if somewhat feels they are accepted enough. However the fraud triangle still doesn’t really outline bribery or corruption explicitly, which is why I think theories such as differential association and GST came about – the fraud triangle cannot apply to every fraud scenario in the real world.

References

IACPA, (2009). The Fraud Triangle and What You Can Do About It. The Certified Accountant (37), retrieved from http://www.lacpa.org.lb/includes/images/docs/tc/tc363.pdf

Agnew, R. (2001). Building on the foundation of general strain theory: specifying the types of strain most likely to lead to crime and delinquency. Journal of Research in Crime and Delinquency, 38 (4), 319-361. Retrieved from http://www.d.umn.edu/~jmaahs/MA%20Theory%20Articles/Agnew%20GST.pdf

Short, J. F. (1957). Differential association and delinquency. Social Problems, 4(3), 233-239. doi:10.2307/798775