Fraud Deterrence - Fraud Triangle

Fraud Triangle

The causal factors that should be removed to deter fraud (as described above) are best described in the “Fraud Triangle.” This idea was first coined by Donald R. Cressey. The Fraud Triangle describes three factors that are present in every situation of fraud:

1. Motive (or pressure) – the need for committing fraud (need for money, etc.);
2. Rationalization – the mindset of the fraudster that justifies them to commit fraud; and
3. Opportunity – the situation that enables fraud to occur (often when internal controls are weak or nonexistent).