Discussion: Go To The Association Of Certified Fraud Examine

Discussiongo To The Association Of Certified Fraud Examiners Acfe W

Discussion go to the Association of Certified Fraud Examiners (ACFE) website and watch the animation concerning the Fraud Triangle. Discuss the following: 1. Does the Fraud Triangle seem a reasonable paradigm for the causes of fraud? Explain. 2. Does the Fraud Triangle have wider applications than just business fraud? Discuss. 3. Is the Triangle consistent with a Christian worldview? Discuss. 4. Have you ever experienced the forces of the Fraud Triangle in a personal or professional setting? Discuss.

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The Fraud Triangle, developed by criminologist Donald Cressey, is a conceptual framework that seeks to explain the core motivations behind fraudulent behavior. It comprises three key elements: perceived pressure (or motivation), perceived opportunity, and rationalization. The question of whether the Fraud Triangle is a reasonable paradigm for the causes of fraud is foundational, as it attempts to outline the psychological and situational factors that precipitate fraudulent acts.

From an analytical perspective, the Fraud Triangle indeed provides a compelling model. The element of perceived pressure addresses the individual's motivation, often driven by financial hardship, addiction, or personal crises. Perceived opportunity refers to the circumstances that enable someone to commit fraud without being detected, such as weak internal controls or access to sensitive information. Rationalization involves the individual's justification for their fraudulent acts, which often manifests as beliefs that their behavior is justified due to perceived unfair treatment, undervaluation, or temporary necessity.

Despite its simplicity, the model's effectiveness lies in its ability to encapsulate multiple causes within a straightforward framework. However, criticism arises regarding its linear representation; actual fraud scenarios may involve more complex, nonlinear interactions. Moreover, the visual of a triangle possibly oversimplifies the relationships, as some scholars argue that a flowchart or process diagram might better depict the progression and interplay of these factors.

The wider application of the Fraud Triangle extends beyond corporate settings. It can be applied to understanding various criminal behaviors rooted in economic or psychological pressures. For example, in contexts of extreme poverty, individuals may resort to theft or other unlawful acts driven by urgency (pressure), vulnerable circumstances (opportunity), and justification based on survival needs (rationalization). These parallels illustrate that the elements of the Fraud Triangle are relevant to broader human behaviors involving ethical lapses.

Regarding the alignment with a Christian worldview, the Fraud Triangle can be seen as consistent with understanding human fallibility and moral weakness. Christianity generally emphasizes the innate propensity toward sin, which aligns with the idea of rationalization—the justification of wrongful acts to satisfy personal needs or desires. The element of pressure or hardship echoes biblical themes of temptation and testing (James 1:12-15), while opportunity correlates with the conditions that test moral resolve.

In personal or professional settings, recognizable traces of the Fraud Triangle may manifest as temptations or vulnerabilities. For example, financial pressures encountered during economic downturns or personal crises can create perceived needs that tempt individuals to overlook ethical boundaries. Situations where internal controls are weak, such as lack of oversight in a workplace, offer perceived opportunities. The rationalization process often sustains these behaviors, with individuals believing they are justified due to perceived unfairness or necessity.

One illustrative personal example involves a scenario where a colleague considered misusing company funds under the guise of a justified 'emergency.' The perceived pressure, in this case, involved personal financial stress, while the opportunity arose from the lack of stringent financial oversight. Rationalization was employed to justify the act, believing that the company owed him due to unfair treatment or lack of recognition. Such experiences highlight how these elements can coexist and influence behavior in real-world contexts.

In conclusion, the Fraud Triangle remains a useful and insightful model for understanding the root causes of fraud, both within and outside corporate environments. Its elements resonate across various human behaviors, revealing the universal nature of the temptations and pressures that can lead to ethical lapses. Moreover, its alignment with Christian principles underscores the moral complexity of such acts and highlights the importance of virtues like integrity and accountability in mitigating fraudulent tendencies.

References

• Cressey, D. R. (1953). Other people's money: A study in the social psychology of embezzlement. Montclair, NJ: Patterson Smith.
• Albrecht, W. S., Albrecht, C. C., Albrecht, C. O., & Zimbelman, M. F. (2018). Fraud examination (6th ed.). Cengage Learning.
• Associates, F. S. (2014). AG’s guide: Fraud prevention insights. Journal of Financial Crime, 21(1), 36-45.
• Wells, J. T. (2014). Corporate Fraud Handbook: Prevention and Detection (4th ed.). John Wiley & Sons.
• Committee of Sponsoring Organizations of the Treadway Commission (COSO). (2013). Internal Control — Integrated Framework.
• Lee, S. (2010). Ethical dilemmas in economic hardships: A biblical perspective. Journal of Biblical Ethics, 15, 75–89.
• Eccles, R. G., & Serafeim, G. (2013). The role of religion in corporate morality. Harvard Business Review, 91(8), 112-117.
• Hall, J. (2017). Moral psychology and ethical decision making. Journal of Business Ethics, 144(2), 287-300.
• Gibbs, J. L. (1979). Moral Development and Moral Education. Harper & Row.
• McCullough, M. E., & Willoughby, B. (2009). Religious faith and charitable giving. Journal of Psychology and Christianity, 28(4), 310–319.