Testing the fraud triangle: a systematic review

Abstract

Purpose The purpose of this study is to examine the existing literature on the fraud triangle. The fraud triangle framework, popularized by Donald Cressey and W. Steve Albrecht, has been used to explain financial crimes since the 1940s. The theory includes that workplace financial crime and fraud occurs only when an offender has sufficient opportunity, pressure and rationalization to commit the crime. The fraud triangle has been empirically applied to the array of criminal behaviors and specific financial crimes and offenders internationally to determine if all three elements are necessary for the crimes to occur. Design/methodology/approach This systematic review summarized 33 empirical studies that have applied all three components of the fraud triangle to study financially criminal behavior committed by both corporations and individuals. The review included published and non-published papers and manuscripts from a variety of sources internationally. Findings Of the 33 studies included, 32 found support for at least one element of the fraud triangle and 27 found support for all three elements. Overall, these studies have shown that the fraud triangle has generally received support across different subjects, industries and countries. Research limitations/implications This research only examined papers using the “fraud triangle” term. Originality/value This paper systematically reviewed different types of studies internationally, concluding that the fraud triangle is largely valid internationally as an explanation for financial crimes.

Determinants of management fraud in the banking sector of Ghana: the perspective of the diamond fraud theory

“…Fraud triangle theory is one of the classical fraud theories which was propounded by Donald Cressey, a criminologist, in 1953. The theory was an attempt to explain why people violate trust imposed in them and engage in fraudulent acts (Akomea-frimpong et al , 2016; Akomea-Frimpong et al , 2019; Homer, 2019). In the theory he put forward an augment that fraudsters often conceived they have financial problem that they cannot share.…”

Fraud Detection Using the Fraud Triangle Theory and Data Mining Techniques: A Literature Review

“…Table 10 presents a comparative summary of seven relevant SLRs and surveys performed in the area of fraud detection, including our contribution. In the "Context" column of Table 10, there are four SLRs that are exclusively related to some aspect of data mining [25,26,28,29], while only one is related to some aspect of fraud theory [75], in addition to other approaches [73,74]. The last row of Table 10 also presents information about the SLR covered in this document, the context of which explores both data mining and fraud theories together, unlike the other seven presented in this table.…”

Public Sector Strategies in Curbing Corruption: A Review of the Literature

“…For example, according to Cressey's (1953) fraud triangle model, opportunity, motivation, and rationalization efforts combine to enable corrupt behavior. While such individual-level explanations remain popular in applied empirical research on fraud and corruption (Homer, 2020;Le et al, 2021), researchers also criticized the fraud triangle for its heavy emphasis on individual-level factors, which are unable to explain more socio-systemic triggers of fraud (Suh et al, 2020) and its incapacity to capture different notions of financial crimes (Huber, 2017). Notwithstanding these criticisms, a detailed analysis of the origins and use of the fraud triangle by Morales et al (2014) identifies the fraud triangle as a trigger stimulating the development of organizational controls as a countermeasure to the emergence of corrupt behavior.…”