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The fraud triangle is often referred to when studying aspects of white collar crime and fraudulent acts.  Two individuals who deserve the most credit for the fraud triangle theory are early criminology researchers Edwin Sutherland and Donald Cressey.   Sutherland and Cressey, both criminologists, were professors and researchers teaching criminology in sociology departments. 

Sutherland developed the "differential association" theory of why people commit crimes.  He believed criminal behavior is learned and not inherited. 

The person most associated with developing the fraud triangle was Donald Cressey.  Cressey was a co-author with and student of Edwin Sutherland.   He defined the fraud problem as a "violation of a position of financial trust that the person originally took in good faith.”

Although Cressey and Sutherland were linked to the concepts embedded in the fraud triangle, neither referred to the term “fraud triangle” or the visual depiction.

Understanding fraud and why it occurs requires a deep understanding of the philosophy and concepts behind each leg of the fraud triangle:  pressure, opportunity and rationalization.  By understanding these concepts and the profile of the typical white collar fraudster, individuals can begin taking proactive steps towards fraud mitigation.

Learning Objectives

  • Explore the theories of Edward Sutherland and Donald Cressey.
  • Recognize symptoms of the fraud triangle.
  • Identify how to address symptoms of pressure, opportunity and rationalization.
  • Recognize how the three sides of the fraud triangle work together.
  • Explore types of fraudulent crimes.
  • Evaluate the profile of the fraudster.
Last updated/reviewed: May 23, 2018

Included In Certifications

This course is included in the following Expert Certifications:

11 CoursesBusiness Fraud Identification and Prevention Certification

  1. Intro to Forensic Accounting and Investigation
  2. Dissecting the Fraud Triangle
  3. Fraud: Focus on Corruption
  4. Fraud: Focus on Fraudulent Disbursements
  5. Fraud: Focus on Cash Component of Asset Misappropriation
  6. Fraud: Focus on Inventory
  7. Fraud: Focus on Financial Statement Fraud – Part One
  8. Fraud: Focus on Financial Statement Fraud – Part Two
  9. Fraud and COSO 2013
  10. Top Fraud Schemes
  11. Fraud Risk Assessments

5 Reviews (24 ratings)Reviews

5
Member's Profile
The course was easy to follow and understand. The presenter's summary was useful when taking the exit exam.
4
Member's Profile
The course covered the objectives and the slides were complete and concise. Properly covered all material.
5
Member's Profile
Excellent course. Instructor was able to bring up relevant examples to sustain interest in course.
3
Member's Profile
Great refresher on the fraud triangle and the current profile of the fraudster.
5
Member's Profile
Clear and well thought out analysis of the fraud triangle.

Prerequisites

Course Complexity: Intermediate

No Advanced Preparation or Prerequisites are needed for this course. 

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
INTRODUCTION AND OVERVIEW
  3:23Introduction to Dissecting the Fraud Triangle
Dissecting the Fraud Triangle
  3:27Edward Sutherland Theories
  5:32Donald Cressey
  2:07Symptoms of the Fraud Triangle
  10:09Pressure
  6:30Opportunity
  3:45Addressing Weak Internal Controls
  7:25SOD
  5:19Ineffective Management Monitoring
  5:24Rationalization
  5:03Three Sides of Triangle Working Together
  8:09Illegal Acts and Connection to Fraud
CONCLUSION
  7:35Profile of Fraudster
CONTINUOUS PLAY
  1:13:48Dissecting Fraud Triangle
SUPPORTING MATERIALS
  PDFSlides: Dissecting the Fraud Triangle
  PDFDissecting the Fraud Triangle Glossary/Index
REVIEW AND TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM