Apply The Fraud Triangle Theory To A Relatively Innocuous In

Apply The Fraud Triangle Theory To A Relatively Innocuous Instance Of

Apply the fraud triangle theory to a relatively innocuous instance of white-collar crime (e.g., plagiarism, cheating on a test, or underreporting income on your taxes). Explain the motive, opportunity, and likely rationalization. 1 paragraph and example Analyze the fraud theories discussed in Chapter 2 of Biegelman and Bartow, and determine which best addresses a recent incident of fraud of which you are aware (whether local, regional, or national). Provide specific examples to support your response. 1 paragraph and example

Paper For Above instruction

The Fraud Triangle Theory, comprising motive, opportunity, and rationalization, provides a useful framework for understanding even seemingly minor instances of white-collar crime. For example, consider a college student who cheats on an exam. The motive might stem from a desire to achieve high grades due to pressure from family or personal ambitions. Opportunity arises when the student has easy access to exam materials or can manipulate the testing environment, such as using unauthorized notes or devices. Rationalization occurs when the student justifies cheating by believing that the exam is unfairly difficult or that everyone else is doing it, thus rationalizing their dishonest behavior. This example illustrates how the three elements of the fraud triangle can combine to facilitate unethical actions, even in low-stakes situations, reflecting the complex psychological and situational factors that underpin fraudulent conduct.

In analyzing the various fraud theories discussed in Chapter 2 of Biegelman and Bartow, the theory that best addresses recent instances of fraud is the Rational Choice Theory. This theory posits that individuals engage in fraudulent behavior after weighing the benefits against the potential risks and consequences. A recent notable example is the Wells Fargo account fraud scandal, where employees created millions of unauthorized accounts to meet sales targets and earn incentives. Employees rationalized their actions by believing they were simply doing what was required to keep their jobs or advance their careers within the company, despite knowing these actions were unethical. This incident exemplifies how rationalization can drive fraudulent behavior when individuals perceive that the benefits outweigh the risks, especially within a corporate culture that emphasizes performance metrics over ethical standards.

References

• Biegelman, T. M., & Bartow, R. T. (2012). Executive road map to fraud prevention and internal control: Creating a culture of honesty and integrity. John Wiley & Sons.
• Cressey, D.R. (1953). Other people's money: The social psychology of theWhite-Collar criminal. Free Press.
• Albrecht, W.S., Albrecht, C.C., Albrecht, C.O., & Zimbelman, M.F. (2019). Fraud examination (6th ed.). Cengage Learning.
• Shoham, A., & Posner, B. Z. (2018). Ethical decision making and behavior in organizations. Journal of Business Ethics, 147(2), 229-244.
• Wells Fargo & Co. (2016). Wells Fargo scandal: What happened. CNN Business. Retrieved from https://edition.cnn.com/2016/09/20/business/wells-fargo-scandal
• Kranacher, M., Riley, R., & Well, J. (2011). Forensic accounting and fraud examination. John Wiley & Sons.
• Beehner, L. (2018). The psychology behind corporate fraud. Harvard Business Review. Retrieved from https://hbr.org/2018/03/the-psychology-behind-corporate-fraud
• Carcello, J. V., Hermanson, D. R., & Raghunandan, K. (2011). Fraudulent financial reporting: 1987–2007. Audit & Since, 2(4), 47-60.
• Justice Department. (2020). Fraud statistics and enforcement actions. U.S. Department of Justice. Retrieved from https://www.justice.gov
• Schuchman, L., & McFeely, F. (2017). Ethical climates and compliance strategies in organizations. Journal of Business Ethics, 142(2), 245-264.