Assignment 1-5 Occupational Fraud and Abuse Behavior Research

Assignment 1-5 Occupational Fraud and Abuse Behavior Research

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1Assignment 1-5 Occupational Fraud and Abuse Behavior Research Assignment 1-5 ACCT341-E1WW Professor Filler January 14, 2012
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2Assignment 1-5 Donald R. Cressey Donald Cressey began his study of criminology while he was still in college. He wanted to figure out what caused a person to embezzle from their employer. Cressey developed a hypothesis: “Trusted persons become trust violators when they conceive of themselves as having a financial problem which is non-shareable, are unaware of this problem can be secretly resolved by violation of the position of financial trust, and are able to apply to their own conduct in that situation verbalizations which enable them to adjust their conceptions of themselves as trusted persons with their conceptions of themselves as users of the entrusted funds or property”. (Wells, 2011). This hypothesis later became the well known fraud triangle. In order for fraud to occur, all three elements have to be present; (1) perceived non-shareable financial need, (2) perceived opportunity, and (3) rationalization. Through Donald Cressey’s research, he explains all three legs of the fraud triangle. (A) A non shareable problem arose from six basic categories: (1) Violation of ascribed obligations, (2) Problems resulting from personal failure, (3) Business reversals, (4) Physical isolation, (5) Status-gaining, and (6) Employer-employee relations. (B) There are two components of the perceived opportunity to commit a trust violation; (1) general information, simply knowing the knowledge that the employee’s position of trust could be violated. (2) Technical Skill which refers to the abilities needed to commit the violation. (C) Rationalization is not an ex post facto means of justifying a theft that has already occurred. The rationalization is a necessary component of the crime before it takes place, because it is actually part of the motivation for the crime. (Wells, 2011).
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This note was uploaded on 02/29/2012 for the course ACCOUNTING 341 taught by Professor Kamradt during the Spring '10 term at Franklin.

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Assignment 1-5 Occupational Fraud and Abuse Behavior Research

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