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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: June 25, 2021

Included In Certifications

This course is included in the following Certification Programs:

11 CoursesBusiness Fraud Identification and Prevention Certification

  1. Introduction to Forensic Accounting
  2. The Fraud Triangle
  3. Fraud: Focus on Corruption
  4. Fraud: Focus on Fraudulent Disbursements
  5. Fraud: Focus on Cash And Assets
  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

28 CoursesInternal Audit Certificate

  1. Internal Audit Standards Overview
  2. Internal Audit Standards - Managing Internal Audit Work
  3. Internal Audit Standards - Executing the Audit Engagement
  4. Identifying and Implementing the Proper Balance of Internal Controls
  5. Documentation Methods For Internal Control Processes
  6. Segregation of Duties for Core Business Processes
  7. Foundations for a Strong Internal Audit Department
  8. Internal Audit Management - Top Skills
  9. Internal Audit: Keys to Managing an Effective Function
  10. Understanding Risk-Based Auditing
  11. Risk Based Auditing – Establishing a Methodology
  12. Risk Based Auditing – Applying the Methodology
  13. Cyber Risk Frameworks And Concepts
  14. Information Technology (IT) Risks in Emerging Business Environments
  15. Fraud Risk Assessments
  16. Professional Skepticism - Keys to Maintaining
  17. Introduction to Forensic Accounting
  18. The Fraud Triangle
  19. Internal Audit Effective Relations with the Audit Committee
  20. COSO 2013 Overview
  21. COSO 2013 - Operational Execution
  22. Internal Audit Emerging Risks for 2021 and Beyond - Part 1
  23. Internal Audit Emerging Risks for 2021 and Beyond - Part 2
  24. Internal Audit Emerging Risks for 2021 and Beyond - Part 3
  25. Internal Audit Emerging Risks for 2021 and Beyond - Part 4
  26. Internal Audit Challenges During Times of COVID
  27. Tools for Internal Control Certificate
  28. Lessons of an Auditor- Tools for Internal Control Certificate

14 Reviews (59 ratings)Reviews

5
Member's Profile
great profile for financial staffing
4
Anonymous Author
this is a good introductory course about fraud risk factors. Suggesting if you could include the 4th factor (capability) which is now becoming acceptable (from fraud triangle to fraud diamond)
5
Member's Profile
The course was great. It provides valuable information and statistics that are helpful in understanding the the types of crime and the profile of the fraudster.
4
Anonymous Author
I found it interesting how the fraud triangle was described in this course, with the information by whom it was originally developed.
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.
5
Member's Profile
Another good course for someone interested in pursuing a career in fraud investigation.
3
Member's Profile
Great refresher on the fraud triangle and the current profile of the fraudster.
5
Anonymous Author
I liked the explanation and context given to the fraud triangle.
5
Anonymous Author
Excellent course. Really covered all the bases on this topic.
5
Member's Profile
good.very informative and provided a holistic understanding.
5
Member's Profile
Clear and well thought out analysis of the fraud triangle.
5
Anonymous Author
The course is a great overview regarding the topic.

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