The Fraud Triangle

The American criminologist Dr. Donald R. Cressey developped in the 1950`s the so called fraud triangle. Referring to this model he claimed that in most occurences of fraud the following three factors were present:


At the instigation of a fraud there is usually a financial need of the perpetrator. This need may be objective (i.e. an emergency situation) or subjective (i.e. prestige).


The majority of the perpetrators of economic crime do not view themselves as criminals, but rather as people, who find themselves, due to no fault of their own, in an unfortunate situation. In order to protect themselves from getting a guilty conscience, they develop a justification for their crime, i.e this might be “I have just borrowed the money and I will pay it back later” or “I am the person with the highest profit margin and I am therefore entitled to the money”.


The perpetrator must have the opportunity to get access to the assets of the company. Often he abuses the trust bestowed in him by the company. Opportunities can be minimized by the implementation of an effective Internal Control System.