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Introduction
This article revisits the Fraud Triangle, an explanatory framework for financial fraud, developed by the American criminologist Donald Cressey. The article is based mainly on reviewing findings from the literature but also includes some results gained from our empirical study conducted with convicted fraudsters in Austria and Switzerland. First of all, we describe briefly several developmental cornerstones of the Fraud Triangle. Its recent theoretical and practical application is reconsidered. Subsequently, the composition and relevant characteristics of this model are explained; thus, all elements, motivation, opportunity, rationalization, its connections between each other and overlapping parts are described. In accordance with the three elements and on the basis of our empirical study we illustrate some within-company measures, which may contribute to a low fraud risk corporate culture. Furthermore, an additional element - capability - enlarges the triangle to a quadrangle, commonly denominated as Fraud Diamond. However, we question the need for every element of the Fraud Triangle as a mandatory precondition for white-collar crime in companies. The Fraud Triangle and its variant, the Fraud Diamond, are appropriate to understand much financial crime, but they are not universally applicable.
Development of the Fraud Triangle
The Fraud Triangle is commonly used by both sociologists and psychologists to account for crime in organizations. Cressey (1953) interviewed more than 120 incarcerated white-collar embezzlers, so-called 'trust violators', in special interviewing rooms in different US prisons and at the inmate's place of employment in the penitentiary. He documents that there have to be more elements than just a financial incentive for a criminal violation of financial trust. Cressey (1950) and his mentor Sutherland (1940, 1941) find a common denominator to aggregate this kind of crime without physical violence into 'trust violation', which is described as the most common but not universal characteristic of white-collar crime. Cressey's data constitute an empirical basis for the Fraud Triangle, starting in 1950 and culminating in 1953. Cressey (1953) designated the following three elements as necessary for white-collar crime:
First, a problem that the offender considers to be 'non-shareable', becomes a stimulus for delinquency if the situation is perceived as a unique possibility to fix the problem, which is regarded as desperate. Subsequent literature frequently shows a division of this motivational element into pressure and incentive. Even...