Description
This article examines how a vision of organizational fraud has been constructed around a
particular technology, the fraud triangle, which was initially developed in the aftermath of
the creation of the fraud examination discipline. We examine the genealogy of the fraud
triangle and follow various chains of translations underlying its construction. One of the
main translation trajectories we uncover presents individuals as vectors of moral riskiness
needing to be vigilantly monitored and controlled by the organization. The organization is
conceived of as a prime site in which fraud is to be addressed – not annihilated but significantly
reduced as long as sufficient care is devoted to establishing layers of vigilance. As
such, the fraud triangle redefines social, political and economic relations through a web
of translations that both celebrate and normalize the use of organizational surveillance systems
to control risk ensuing from the individual’s (alleged) frail morality.
The construction of the risky individual and vigilant
organization: A genealogy of the fraud triangle
Jérémy Morales
a,?
, Yves Gendron
b
, Henri Guénin-Paracini
b
a
ESCP Europe, CPO Department, 79 avenue de la République, 75543 Cedex 11 Paris, France
b
Faculté des sciences de l’administration, Pavillon Palasis-Prince, 2325, rue de la Terrasse, Université Laval, Québec City, Québec G1V 0A6, Canada
a b s t r a c t
This article examines how a vision of organizational fraud has been constructed around a
particular technology, the fraud triangle, which was initially developed in the aftermath of
the creation of the fraud examination discipline. We examine the genealogy of the fraud
triangle and follow various chains of translations underlying its construction. One of the
main translation trajectories we uncover presents individuals as vectors of moral riskiness
needing to be vigilantly monitored and controlled by the organization. The organization is
conceived of as a prime site in which fraud is to be addressed – not annihilated but signif-
icantly reduced as long as suf?cient care is devoted to establishing layers of vigilance. As
such, the fraud triangle rede?nes social, political and economic relations through a web
of translations that both celebrate and normalize the use of organizational surveillance sys-
tems to control risk ensuing from the individual’s (alleged) frail morality. In the process,
other visions of fraud, focused on the broader role of society, political agendas and power-
ful economic institutions in engendering and preventing fraud, escape from view.
Ó 2014 Elsevier Ltd. All rights reserved.
Introduction
Many people could, given the right set of circumstances,
be capable of fraud. Experts in this area talk about the
‘‘fraud triangle,’’ whose three legs are: the opportunity
to act dishonestly, an incentive or pressure to do so,
and rationalization by the fraudster of their actions. In
other words, you need an offender motivated either
by ?nancial gain, pressure to performor a threat to their
power, money or status; you need susceptible victims;
and you need an absence of controls to prevent or halt
the scam. (The Observer, December 21, 2008)
CFOs can’t be expected to peer into the souls of every
employee or business partner, of course, but they do
need to be more cognizant than ever of the three sides
of the classic ‘‘fraud triangle’’: pressure, opportunity,
and the capacity to rationalize. When those elements
unite, fraud often erupts. (CFO Magazine, April 1, 2009)
These two quotations attest to the use in both the main-
stream and specialized press of a particular expression,
‘‘the fraud triangle,’’ in reference to the activity of explain-
ing, detecting or preventing fraud. They also illustrate key
assumptions often present in discourses surrounding the
fraud triangle: an individual activity and clearly worthy
of condemnation, fraud is motivated by the desire for per-
sonal gain, either in wealth or power. To prevent it, organi-
zations need to keep a closer eye on the ‘‘soul’’ of their
members and, given that fraud ensues from lack of control,
it follows that the best way to keep it from spreading is to
foster control and cultivate speci?c skills in its detection. In
this article, we examine how the notion of organizational
fraud has been conceptualized through a particular tech-
nology: the fraud triangle.http://dx.doi.org/10.1016/j.aos.2014.01.006
0361-3682/Ó 2014 Elsevier Ltd. All rights reserved.
?
Corresponding author. Tel.: +33 149232029.
E-mail addresses: [email protected] (J. Morales), yves.gendron
@fsa.ulaval.ca (Y. Gendron), [email protected]
(H. Guénin-Paracini).
Accounting, Organizations and Society 39 (2014) 170–194
Contents lists available at ScienceDirect
Accounting, Organizations and Society
j our nal homepage: www. el sevi er. com/ l ocat e/ aos
Broadly speaking, our research connects to the power of
systems of thought in shaping people’s interpretive
schemes along a particular angle, in in?uencing social de-
bates, and in delineating the boundaries of professional
jurisdictions. As illustrated in the quotations above, the
fraud triangle promotes a vision where certain events
and types of behavior are referred to and shaped as fraud-
ulent and abnormal. The triangle also aids in the construc-
tion and legitimation of a ?eld of intervention around
organizational deviance problems. We aim to understand
how the fraud triangle has been articulated through spe-
ci?c conceptualizing angles.
For several decades, both academic and professional
literature has taken great interest in the notion of fraud
or, more generally, the ‘‘dark side’’ of organizations
(Vaughan, 1999). Many scholars and practitioners have
sought to better understand the causes of organizational
deviance and assess different methods for detecting and
preventing it. Keen interest in the matter gave rise to
the emergence and propagation of a ?eld of knowledge
spawned by the meeting of two disciplines that had been
relatively distinct previously: accounting and criminol-
ogy. We will show that the foundation of this hybrid
?eld of knowledge, ‘‘fraud examination,’’ was built lar-
gely on a particular image, that of the ‘‘fraud triangle.’’
Tracing the genealogy of the fraud triangle, therefore,
leads us to examine the creation of the ?eld of fraud
examination.
Importantly, our primary interest is not in how the
fraud triangle is technically used to detect fraud, but in
how its conceptualization and the underlying constitution
of a ?eld of knowledge have been structured around spe-
ci?c angles. Following translations made in the academic
and professional literature, this study highlights that a spe-
ci?c vision of fraud characterizes how the triangle has been
conceptualized and conveyed through formal discourse.
Thus, we contribute to an emerging ?eld of inquiry on hy-
brid processes of knowing, spanning across the boundaries
of organizations, professions and groups of experts (Miller,
Karunmäki, & O’Leary, 2008), showing not only how ideas
move across disciplines, but also how a corpus that aspires
to be both new and distinct from existing bodies of knowl-
edge may take root.
In our genealogy, we will trace the different transla-
tions, developments and claims that have surrounded the
spread of the triangle and possibly impacted the construc-
tion of a new area of competence and its legitimization
around the notion of fraud. Our empirical task, therefore,
is to follow and reconstruct the chain of translations (La-
tour, 1987) surrounding the fraud triangle. Every transla-
tion entails a certain modi?cation of the original concept
(Gendron & Baker, 2005). Further, the term ‘‘translation’’
comprises the unexpected twists and deformations that
may occur in the spread of ideas. While of?cial histories
of ?elds of knowledge often ignore these elements of
unpredictability (Kuhn, 1970), they are nevertheless com-
monplace. Translation also implies continuous work in
extending the web of meanings surrounding a given con-
cept. Thus, in our case, the fraud triangle does not have a
single, ?xed meaning; it is subject to continuous reinter-
pretation. Even the ‘‘core’’ elements of the triangle changed
signi?cantly when they were imported into the nascent
fraud examination discipline.
The translations we follow point to a distinctive way of
understanding the subject studied by organizational devi-
ance professionals – a subject that is no longer limited to
the behavior of individuals in and around an organization,
but that nowalso extends to their character. Hence in addi-
tion to the notion of translation developed by Latour
(1987), we will make use of some of Foucault’s writings
on the normalization and constitution of the subject (Fou-
cault, 1994, 2001, 2004), and in particular, his analysis of
the intersection between psychiatry and criminology (Fou-
cault, 1981). The spread of the fraud triangle has translated
into the development of a discourse promoting the evalu-
ation, monitoring and normalization of the character of
organizational members. This is because, together with
organizational control mechanisms, individuals’ morality
is presented as key to understand fraud risk factors. Be-
yond usual auditing devices focused on conformity con-
trols, the fraud triangle thus introduces morality and
immorality as a target for fraud ?ghting.
Before going further, we want to stress that our geneal-
ogy is not aimed primarily at evaluating how the fraud tri-
angle and its different articulations resonate with
surrounding and broader discourses (e.g., Miller & O’Leary,
1987), but rather to follow chains of translations and
examine the fraud conceptualizations they sustain. Also,
while we distinguish translations along three main periods
(roughly de?ned – i.e., moving upstream; translations real-
ized within the fraud examination community; moving
downstream), in our analysis we do not seek to highlight
speci?c variations within each of them. Our interest is to
unveil what we view as the most important translations
during each phase.
A key goal of our study is to trace the normative
assumptions that underlie the association between fraud
and morality. We will show that they form the basis of a
discourse, not only about fraud detection and deterrence,
but also about normality and deviance within organiza-
tions. De?ning an act as a transgression or fraud is ambig-
uous (Berger, 2011). This is because fraud de?nitions relate
to sociopolitical processes of labeling and are matters of
disagreement and con?ict in society (Becker, 1963). Yet,
the triangle is presented as a technical device that aims
to prevent acts deemed to be naturally unacceptable. This
enterprise is clearly normative: through an ostensibly neu-
tral technicality a speci?c point of view on organizational
deviance is promoted. However, this is a normalizing view-
point that conceives of fraud as a public issue caused by
individuals’ frail morality needing to be addressed by the
organization. In other words, the conceptualizations and
re?nements of the fraud triangle are based on implicit sep-
arations between normality and abnormality, yet the
boundaries between normal and abnormal are not dis-
cussed – as if the latter were natural and universally
accepted.
We thus show how the fraud triangle traces links be-
tween accounting, auditing and risk management on the
one hand, and assumptions about normality and organiza-
tional deviance on the other. In particular, our analysis
points to the fraud triangle extending the ?eld of organiza-
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 171
tional surveillance beyond individuals’ behavior to include
the assessment of risks stemming from individual subjec-
tivity. Thus, the fraud triangle re?ects and participates in
the construction of one of the main social forces of our
modern age: the rede?nition of social, political and eco-
nomic relations around systems that position the subject
as a vector of riskiness and danger (Foucault, 1981) and
set up and generalize surveillance and the assessment of
risks stemming from individual subjectivity (Foucault,
2004).
Also, our analysis of the triangle’s main translation tra-
jectories points to a climate of suspicion promoting a ?eld
of practical intervention within the organization, which is
made responsible for establishing vigilant systems of con-
trol aimed at preventing and detecting lapses in organiza-
tional members’ morality. Therefore, we study
conceptualizations of organizational deviance, as epito-
mized in the discourse of the fraud triangle, to show how
they relate to normalizing stances encouraging organiza-
tions to take responsibility for controlling individual char-
acter. Other visions of fraud, focused on the broader role of
society, political agendas and powerful economic institu-
tions in engendering and preventing fraud, are systemati-
cally downplayed and overlooked. In the process, the
organization is constructed as a prime site in which fraud
can be reined in – not annihilated but signi?cantly reduced
as long as suf?cient care is devoted to establishing a bat-
tery of vigilant controls. Conditions are then arguably in
place for social order, and the dominant interests it sus-
tains, to reproduce.
In the following section we present our research meth-
ods. Next, we move upstream in the chains of translations
that have led to the construction of the fraud triangle. Fol-
lowing that, we present the main architects of the triangle
and describe the translations they made as well as the
strategies they followed to present the triangle as a legiti-
mate way of thinking and intervening in organizational
deviance. Then, we move downstream in the chains of
translations to follow some of the successive shifts that oc-
curred as the network of support around the fraud triangle
was being extended. In particular, we show that these
downstream chains promote a climate of suspicion that
enrolls the organization as a key site of fraud control. In
the discussion section, we emphasize one of the main
interpretive statements ensuing from our analysis, namely,
that organizational fraud is conceived of as a dual failure,
one in individual morality and the other in the organiza-
tion’s endeavors to control for individual probity. Lastly,
the conclusion articulates some of the main implications
resulting from our work.
Research methods
Our genealogy of the fraud triangle is carried out
through documentary study. Our study is especially predi-
cated on a pivotal practitioner book, which articulates con-
nections between the nascent ?eld of fraud examination
and the discipline of criminology: Occupational Fraud and
Abuse, by Joseph Wells (1997). In addition to republishing
this book three times under the title Corporate Fraud
Handbook: Prevention and Detection, Wells founded the
Association of Certi?ed Fraud Examiners (ACFE). The book
is part of the ACFE’s examination preparation toolkit. It
helped guide our documentary research upstream from
the triangle and shed light on some of its origins. We also
looked into the ways in which the fraud triangle and some
of its translations are articulated in ACFE literature. Down-
stream, we studied how the triangle and some of its deriv-
atives are discussed in a range of journalistic, academic and
professional documents. All told, our documentary analysis
covers a broad range of successive translations, from the
emergence of white-collar criminology to recent shifts
and re?nements in the notion of the fraud triangle. Our
analysis is articulated into three distinct parts – which
can be viewed as three ‘‘moments’’ of translations.
Our analytical journey begins with the examination of a
strand of criminological research devoted to white-collar
crime, which Wells (1997) presents as one of the concep-
tual bases of fraud examination knowledge. Although we
recognize that the initiators of the white-collar crime
movement built their ideas on previous knowledge and
networks (Latour, 1987), the chains of translations could
have been retraced ad in?nitum and we had to choose a
reasonable starting point. In particular, we discuss several
debates among criminologists that we link to competing
visions of fraud.
Yet these debates were largely overshadowed when the
fraud triangle was conceptualized in the nascent ?eld of
fraud examination – the criminological foundations of
fraud examination being presented as an indisputable
and generalizable knowledge area. We are particularly
interested in examining how the ACFE built a body of
knowledge around ‘‘fraud examination,’’ and what sort of
vision of fraud it conveys. In addition to Wells’ (1997)
book, we analyze a number of documents connected to
the ACFE, including Albrecht and Albrecht’s (2004) book
entitled Fraud Examination & Prevention, whose ?rst author
was ACFE’s ?rst president.
In order to investigate, downstream and in greater
depth, the ‘‘spinning off’’ of the fraud triangle beyond the
ACFE, we made an inventory of publications on the subject
using bibliometric tools. We searched for the term ‘‘fraud
triangle’’ without any journal speci?cation in the following
databases: Business Source Complete, ScienceDirect, Emer-
ald and Jstor. Through this process we identi?ed 99 arti-
cles. Of these, we considered 54 relevant for our study.
1
By retracing bibliographies, we obtained ten additional arti-
cles that mention the three dimensions of the triangle with-
out speci?cally using the term ‘‘fraud triangle’’ or used the
term but were not referenced in our selected databases.
We should note that these articles were published primarily
in academic journals, but also in a number of professional
and hybrid journals. We read and analyzed all 64 articles.
For each document, we listed (when relevant) the theoreti-
cal framework(s) used, the de?nition of fraud (and related
1
We eliminated articles that only mentioned the term ‘‘fraud triangle’’
without really presenting the model and without indicating its dimensions.
We also eliminated articles which were only returned by the database
because they cited another article whose title includes the term ‘‘fraud
triangle.’’
172 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
references), the causes of fraud, the solutions to fraud, the
methodology, the way the triangle is used (presence of all
the dimensions, dimensions changed or added, translation
of each dimension), the speci?c ?eld(s) of application men-
tioned (e.g., employee fraud, misstatement, corruption, etc.),
and the main argument. Four main translation trajectories
emerged as signi?cant: focus on internal control, emphasis
on morality, assertion of suspicion, and promotion of organi-
zational surveillance. We followed these four themes down-
stream chains of translation. Further, as auditing standards
were often quoted in these articles to provide de?nitions
of fraud, we analyzed the translations comprised in SAS 99
and ISA 240. Although these standards do not mobilize the
expression ‘‘fraud triangle,’’ both reproduce the three
dimensions mentioned by Wells as constituting the triangle.
Finally, we examined several key documents in the risk
management, professionally-based literature. We limited
our analysis to documents issued by major accounting
organizations, such as the American Institute of Certi?ed
Public Accountants (AICPA), the Chartered Institute of
Management Accountants (CIMA), the Center for Audit
Quality (CAQ) and the Big Four. Accountants have been
particularly involved in promoting their expertise in risk
management, appropriating and rede?ning the concept of
risk and its management along a variety of angles (Spira
& Page, 2003). We identi?ed the documents we analyzed,
which are referenced below, either by questioning the
Internet (using sentences such as ‘‘managing fraud risk’’)
or examining the organization’s website.
Moving upstream in the chain of translations: The
articulation of an individualizing vision of fraud
A signi?cant component in the development of a net-
work of support surrounding the fraud triangle is the foun-
dation of a new ?eld of knowledge and intervention; that
of fraud examination as defended and promoted by the
ACFE. Through our genealogical work, we ?rst analyze
how criminology was initially translated into fraud exam-
ination. In this respect, Wells (1997) begins his book by
presenting fraud specialization as grounded in criminolog-
ical knowledge. He brings together the writings of Edwin
Sutherland (pp. 8–10) and Donald Cressey (pp. 10–22) to
tie the ?eld of fraud examination to previous academic
studies in criminology. Presenting the ‘‘fraud triangle’’
(Wells, 1997, p. 11) – comprising pressure, opportunity
and rationalization – as having stemmed from ‘‘Cressey’s
?nal hypothesis’’ gives it rhetorical strength. However, as
shown below, Wells makes signi?cant translations when
articulating this relationship and promotes a speci?c vision
of fraud that differs from the one advocated by these two
scholars. Generally speaking, we aim to show that the
importation of criminology into the nascent fraud exami-
nation discipline is characterized by a signi?cant transla-
tion bias that dismissed or downplayed segments of
criminological knowledge that viewed crime from socio-
logical or systemic angles.
In the book which made him famous, Sutherland (1937)
endeavors to show that the causes of criminality should
not be sought in the psychological traits of the individual,
but rather in processes of socialization and cultural trans-
mission that allowed certain individuals to learn criminal
techniques and, at the same time, led them to align their
worldview with that of their ‘‘profession’’ – internalizing
its customs, codes and practices.
2
In 1939, he was ap-
pointed president of the American Sociological Association
and during his ?rst presidential address he coined the
term ‘‘white collar crime,’’ de?ned as the violation of
delegated trust within an organization (Sutherland, 1940).
A few years later, he put forward a systematic analysis of
it, stating that:
These violations of law by persons in the upper socio-
economic class are, for convenience, called ‘‘white collar
crimes.’’ This concept is not intended to be de?nitive,
but merely to call attention to crimes which are not
ordinarily included within the scope of criminology.
White collar crime may be de?ned approximately as a
crime committed by a person of respectability and high
social status in the course of his occupation. (Suther-
land, 1983, p. 7)
Sutherland (1983) showed that criminology greatly
underestimated (or even obscured) the violations of law
perpetrated by persons of the upper socioeconomic class.
3
His hypothesis, now commonly referred to as ‘‘differential
association theory,’’ highlighted socialization and learning
processes – not pathological psychological traits – as central
explanations of criminal behavior. In adopting this stance,
‘‘Sutherland discredited widely-held theories of his day that
attributed criminal behavior to poverty and its associated
pathologies’’ (Shapiro, 1990, p. 346), what Braithwaite
(1985, p. 2) calls the ‘‘traditional theories of crime which
blamed poverty, broken homes, and disturbed personali-
ties.’’ The various cases (especially the biographical ones)
presented by Sutherland are enlightening in this regard
and show how the people concerned gradually lose their
attachment to a certain de?nition of honesty as they dis-
cover that their professional success depends to a large ex-
tent on performing unethical or even illegal acts. Given the
interpersonal competition that exists in the workplace,
refusing to compromise their initial values may prevent
individuals from being as effective in their occupation as
their less scrupulous colleagues. The individual then learns,
along with techniques speci?c to the job, to adopt certain
‘‘rationalizations’’ which justify behavior that is nevertheless
illicit (Sutherland, 1983, p. 245).
2
Based on the memoir of a former thief, the author develops the idea
that theft is not a set of isolated acts but a social institution, and that
professional thieves constitute a community. A particularly important
?nding of this book is to show how, unlike amateurs, professional thieves
manage to avoid legal sanctions thanks to the intervention of a ‘‘?xer’’ (see
Sutherland, 1937, pp. 65–87).
3
This book was very controversial in the United States mainly because
the author broke a taboo by demonstrating the magnitude of the crimes
perpetrated by the country’s elites (both in large corporations and in
government) and also because he showed that many acts which are never
brought before a criminal court should nevertheless be considered crimes.
Accordingly, the strength of white-collar criminals is that they are able to
in?uence legislation and law enforcement and also that they are most often
judged by administrative commissions and civil or equity jurisdictions,
which may allow white-collar criminals to avoid the stigma associated with
criminal identity.
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 173
Sutherland (1983) counters previous studies in crimi-
nology by expanding the de?nition of fraud to include acts
that had not been sanctioned by a criminal court (and
which do not, therefore, appear in the statistics used by
most criminologists). His argument is that the de?nition
of white-collar crime should include violations of non-
criminal law (Berger, 2011, pp. 6–7). As Coleman (1985,
p. 4) points out, one of Sutherland’s objectives was to dem-
onstrate that the violations perpetrated by persons of the
upper socioeconomic class are not treated in the same
way as others because the powerful have the ability to
in?uence legislation and, most importantly, its
enforcement.
Sutherland recognizes violations of law but proposes a
broader de?nition of violation, especially relating to re-
straint of trade, rebates, infringement, misrepresentation
in advertising, and ?nancial manipulations. He also in-
cludes ‘‘unfair labor practices’’ (Sutherland, 1983, p. 14).
His de?nition of ‘‘?nancial manipulations’’ (dealt with in
chapter 10, pp. 153–173), for example, is particularly
broad:
The term ‘‘?nancial manipulation’’ is used here to refer
to practices of corporations or of their executives which
involve fraud or violation of trust. These practices
include embezzlement, extortionate salaries and
bonuses, and other misapplications of corporate funds
in the interest of executives or of the holders of certain
securities; they include public misrepresentation in the
form of stock market manipulations, fraud in sale of
securities, enormous in?ation of capital, inadequate
and misleading ?nancial reports, and other manipula-
tions. (Sutherland, 1983, p. 153)
Expanding this subject matter beyond what is statuto-
rily de?ned as crime by existing criminal law did not go
without controversies. This is because de?ning an act as
deviant, criminal, transgressive or fraudulent is intrinsi-
cally ambiguous (Becker, 1963, 2011). Indeed, rules differ
from group to group and a person may break the rules of
one group by the very act of abiding by the rules of another
group. De?ning a rule (and hence what constitutes rule-
breaking), therefore, involves a sociopolitical process and
its content is a matter of disagreement and con?ict to the
point where of?cial rules may differ from what the major-
ity of people consider to be appropriate (Becker, 1963, p.
15).
This position contradicts a commonly held assumption
about rule-breaking – as obvious acts of deviancy ensuing
from the perpetrator’s deviant morality:
What laymen want to know about deviants is: why do
they do it? How can we account for their rule-breaking?
What is there about them that leads them to do forbid-
den things? Scienti?c research has tried to ?nd answers
to these questions. In doing so it has accepted the com-
mon-sense premise that there is something inherently
deviant (qualitatively distinct) about acts that break
(or seem to break) social rules. It has also accepted
the common-sense assumption that the deviant act
occurs because some characteristic of the person who
commits it makes it necessary or inevitable that he
should. Scientists do not ordinarily question the label
‘‘deviant’’ when it is applied to particular acts or people
but rather take it as given. In so doing, they accept the
values of the group making the judgment. (Becker,
1963, pp. 3-4)
According to Becker, the notions of rule-breaking and
deviance (and therefore fraud) cannot be intrinsically de-
?ned by character traits, living conditions (economic sta-
tus, lifestyle) or even by particular acts, because all of
these de?nitions would deny the political and divisive nat-
ure of rule-making: ‘‘deviance is not a quality of the act the
person commits, but rather a consequence of the applica-
tion by others of rules and sanctions to an ‘offender’’’
(Becker, 1963, p. 9). What is considered as fraud depends,
therefore, on the values and position of the person speak-
ing and it is important to examine his/her assumptions
to better understand what motivates him/her to express
a certain moral view.
Overall, it can be argued that disagreement over the
nature (individual or collective) and cause (moral or socio-
logical) of white-collar crime characterizes the ?eld of
criminology (Benson & Simpson, 2009; Berger, 2011; Cole-
man, 1985; Colvin et al., 2002; Poveda, 1994). Accordingly,
Berger (2011, p. 27) suggests distinguishing between
macro-sociological, micro-sociological, and individualistic
explanations of white-collar crime. Macro-sociological the-
ories ‘‘focus on the broader historical, economic, and polit-
ical factors that impact organizations’’, while micro-
sociological theories ‘‘focus on the link between individual
actors and their immediate organizational circumstances.’’
For their part, individualistic theories ‘‘focus on the causes
of crime that are located within the individual rather than
the social environment.’’ According to this classi?cation,
Sutherland provides micro-sociological explanations of
white-collar crime (Berger, 2011, pp. 35–36), whereas
Cressey focuses on individualistic explanations (p. 30).
Macro-sociological theory does not appear to have had
any in?uence on the crafting of the fraud triangle (for
examples of macro-sociological theories, see Coleman,
1985; Poveda, 1994).
Cressey’s individualistic theory occupies a prominent
place in of?cial representations of how fraud examination
knowledge was founded. Although one does not necessar-
ily expect practitioners to adopt a position in an academic
debate, the creation of a formal body of practitioner knowl-
edge may be founded on a particular representation of
reality and, therefore, favor one orientation to the detri-
ment of others. Certain representational choices have thus
been made (explicitly or implicitly) in establishing the
knowledge base that underpins the fraud examiners’ juris-
dictional claim. However, the of?cial story presents these
choices as obvious and uncontroversial, as if they naturally
ensue from some inherent properties of fraudulent acts
and fraudsters, and a long tradition of ‘‘scienti?c’’ research
in criminology. In other words, the foundation of a jurisdic-
tional claim based on a view of fraud inspired by Cressey’s
research involves a number of assumptions.
Cressey, a doctoral student of Sutherland, studied the
psychology of the violation of ?nancial trust using a series
of interviews conducted with prison inmates, who had
174 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
been convicted of embezzlement (Cressey, 1953). His
methods for selecting people to interview reveal his re-
search focus: choosing from inmates at three US prisons,
incarcerated after being convicted of certain crimes; he se-
lected those he considered to have initially accepted, in
good faith, the position of trust that was used to perpetrate
the crime (Cressey, 1953, p. 20).
4
In focusing on prison in-
mates, Cressey eschewed the study of an entire range of
white-collar crimes considered to be the most relevant by
Sutherland, whose argument is that the strength of white-
collar perpetrators lies in their ability to avoid criminal con-
victions better than anyone else. In particular, Cressey ig-
nored acts of tax evasion and collective fraud. Moreover,
by choosing only people who, upon examination of their ?le
or after interviewing them, seem to have initially accepted
the job ‘‘in good faith,’’ he favored the emergence of a dis-
course where the people he met did not consider themselves
to be professional thieves (see Sutherland, 1937). The advan-
tage of this method is that it results in a relatively homoge-
neous set of cases, ruling out the possibility of variation by
selecting cases he felt were the result of the same type of
behavior and developed in a similar way.
Cressey assumed that embezzlement is an act commit-
ted for individual and ?nancial motives. This position ap-
pears quite clearly in his interpretation of the acts of
misappropriation committed by employees against their
employers (Cressey, 1953, pp. 57–66). Amongthe numerous
cases presented, only one is not motivated by ?nancial con-
cerns – that of anemployee who committedanact of misap-
propriation, not because of personal dif?culties, but because
he resented his status in the organization: he felt that he
was underpaid, overworked and treated unfairly. Yet Cres-
sey persisted in considering this behavior to be motivated
by an individual problem, which ignores any broader expla-
nation, even though the individual interviewed points to a
set of social and collective motives linked to relations of
authority that he considered unequal and unfair.
When considering the spectrum of perspectives in the
?eld of academic criminology, Cressey’s thinking appears
to be rather restricted.
5
He does not examine every type
of white-collar crime, but only embezzlement perpetrated
by an individual acting alone, motivated by personal gain,
and for which he has betrayed a position of trust that he
had initially accepted in good faith.
6
Examining his work
in greater detail, at the core of Cressey’s thesis, we ?nd a
combination of three elements that arguably help to explain
the process by which an individual comes to commit an act
of embezzlement:
Trusted persons become trust violators when they con-
ceive of themselves as having a ?nancial problem which
is non-shareable, are aware that this problem can be
secretly resolved by violation of the position of ?nancial
trust [perceived opportunity], and are able to apply to
their own conduct in that situation verbalizations
which enable them to adjust their conceptions of them-
selves as trusted persons with their conceptions of
themselves as users of the entrusted funds or property
[rationalization]. (Cressey, 1953, p. 30)
Of these three conditions, the most evident (to the point
where it may seem tautological) is that of perceived oppor-
tunity: if a person commits an act, then he or she must nec-
essarily have perceived the possibility to do so. Besides,
Cressey (1953) gives ‘‘opportunity’’ less importance; the
relevant chapter is particularly short (15 pages versus 44
for the chapter describing what constitutes a non-share-
able problem and 46 for the one de?ning rationalization).
In this short chapter, he seeks above all to demonstrate
that one should not consider ‘‘opportunity’’ as such but
‘‘perceived opportunity,’’ meaning that organizational con-
trols are less important than individuals’ perceptions. Cres-
sey provides additional details on opportunity in the
preface to the 1973 edition:
The general argument ordinarily is that embezzlement
can be eliminated by tighter accounting controls. My
response was, and is, that modern business necessarily
requires conditions of trust and that, therefore,
accounting controls rigid enough to eliminate embez-
zlement (which, by de?nition, involves conversion of
money or goods with which the actor is entrusted) will
also eliminate business. [. . .] Accountants and other
businessmen continue to write as if the opportunity
for trust violation can and should be eliminated. [. . .]
What is needed is a prevention program clearly based
on the fact that objective opportunities for embezzle-
ment are necessarily present in modern business orga-
nizations. (Cressey, 1973, pp. xii-xiii)
Therefore, Cressey is skeptical about internal controls’
ability to eliminate opportunity, and argues that one
should assume that ‘‘objective opportunities’’ always exist.
In the chapter on opportunity, he does address the issue of
how to reduce opportunity but primarily seeks to under-
stand why people eventually come to perceive their situa-
tion as an opportunity to engage in embezzlement. Thus,
Cressey focuses less on the link between individuals and
organizational circumstances than on phenomena located
‘‘within’’ individuals.
Of the three elements Cressey describes, the one that
has received the most criticism is the non-shareable ?nan-
cial problem (Coleman, 1985). The author’s idea is that,
even when someone has had the possibility to embezzle
for several years, he will only do so because he is facing a
problem that he thinks he cannot ‘‘share’’ with anyone
and hence does not seek for others’ help. Again, however,
4
He obtained the list of people convicted for: embezzlement, larceny by
bailee, con?dence game, forgery, uttering ?ctitious checks, conspiracy,
grand theft, theft of government property, falsi?cation of a bill of lading
used in interstate shipment and theft of goods in interstate shipment
(Cressey, 1953, p. 23).
5
For instance, beyond Sutherland’s ‘‘differential association theory’’,
Merton crafted a ‘‘strain theory’’ (based on Durkheim’s concept of anomy),
Cohen (1955) articulates a ‘‘theory of subcultures’’, Sykes and Matza (1957)
offer a ‘‘neutralization theory’’, Cohen and Felson (1979) suggest a ‘‘routine
activity theory’’ (to include characteristics of the offended), Coleman (1985)
offers an ‘‘elite theory’’ before advocating for an ‘‘integrated theory’’
(Coleman, 1987), Braithwaite (1989) suggests a ‘‘theory of differential
shaming’’, Shapiro (1990) supports an ‘‘offense-based approach’’ (when
Sutherland followed an offender-based approach), Vaughan (2005) speaks
of a ‘‘normalization of deviance’’, and Benson and Simpson (2009) suggest
an ‘‘opportunity theory.’’ Berger (2011) also mentions ‘‘rational choice
theory’’, ‘‘control theory’’ and ‘‘criminogenic market structures theory.’’
6
All the persons he interviewed were men.
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 175
Cressey is not interested in identifying external factors that
may ‘‘explain’’ why certain problems become ‘‘non-share-
able.’’ Rather, he argues that misappropriation ensues from
the individual viewing his problems as non-shareable.
Finally, the third element is the notion of rationaliza-
tion, borrowed from Sutherland, but rede?ned according
to a very different view.
7
While Sutherland (1937) argues
that rationalization helps to explain why professional
thieves proudly consider themselves as such, Cressey
(1953) claims that embezzlers tend to rationalize their
behavior in ways that imply that deep down, they are hon-
est. Speci?cally, Cressey contends that, before committing a
violation, the person convinces himself that the act will not
compromise his identity as an honest person and that it con-
forms to a certain ethical view of himself. Cressey provides
illustrations of the most common rationalizations and points
out that this concept must not be confused with psycholog-
ical justi?cation carried out after the fact (Cressey, 1953, p.
viii). According to him, these rationalizations are produced
before the crime is committed and they are not used to
make the act intelligible for others, but rather for oneself
(p. 95): they make the act possible because they make it
morally acceptable. However, even though this argument
is rather convincing, Cressey bases his ?ndings on inter-
views carried out with prison inmates, i.e. after the fact
and in a situation of justi?cation vis-à-vis a stranger. His
interpretation of the process of rationalization, therefore, is
subject to criticism.
Overall, Cressey’s (1953) ?ndings do not tell us much
about sociological causes of ‘‘fraudulent’’ violations.
Mainly, they focus attention on the idea that embezzle-
ment is committed when an individual considers that his
situation makes the act of misappropriation feasible, nec-
essary and acceptable. Cressey focuses on phenomena lo-
cated within the individual – perceptions, opinions and
justi?cations that one gives to oneself. In so doing, his the-
orizing is consistent with individualistic explanations of
criminal behavior (Berger, 2011, p. 30), overlooking the mi-
cro-sociological (one’s immediate social and organizational
environment) as well as macro-sociological explanations
(broader historical, economic, and political factors). Cres-
sey’s work is thus based on a very particular conception
of white-collar crime that marginalizes social environ-
ments and circumstances.
Cressey thus offers a particular view of the offender:
privileging individualist motives of transgression, he
downplays the role of sociopolitical explanations, creating
an individualizing vision of white-collar crime which, as
shown below, is nevertheless capable of supplying argu-
ments to de?ne and justify an area of intervention for cer-
tain classes of professionals who claim jurisdiction over
the problem of organizational fraud (Abbott, 1988). Finally,
it is worth noting that Cressey (1953) does not stress the
word ‘‘fraud’’ in his book; the index indicates only one page
in which ‘‘fraudulent checks’’ is found, while ‘‘embezzle-
ment’’ is found on 24 pages.
Realizing translation through the constitution of a
knowledge claim
Although often attributed to Cressey, the term ‘‘fraud
triangle’’ does not appear in his writings. In fact, it was
not coined by a criminologist at all, but by Joseph Wells,
a CPA. However, drawing on Cressey, Wells and several
other proponents laid claim to a particular area of profes-
sional work while grounding it in a formal body of knowl-
edge ostensibly derived from scienti?c criminology.
Signi?cant translations were made in the process, espe-
cially when articulating a speci?c de?nition of fraud that
resulted in a number of departures or biases from the ori-
ginal criminological work. In what follows, we highlight
the main translations that Wells and other ACFE propo-
nents realized in attempting to build a network to natural-
ize the fraud triangle. Then, we examine some of the main
rhetorical strategies they used to secure support.
Translational biases in the initial formulations of the triangle
Wells played a leading role in formalizing the fraud tri-
angle – yet his position within de?nitional debates is not
neutral. As indicated below, the way in which he translated
criminological knowledge involves the creation of a system
of representations promoting a sense of causality between
individual character and fraud, which needs to be reined in
by the organization. In his 1997 book, Wells promotes a
conceptualization of fraud grounded in what is presented
as one of the cornerstones of criminological thought,
namely, the embezzlement ‘‘hypothesis’’ as originally con-
ceived by Cressey:
One of Sutherland’s brightest students at Indiana Uni-
versity during the 1940s was Donald R. Cressey
(1919-1987). While much of Sutherland’s research con-
centrated on upper world criminality, Cressey took his
own studies in a different direction. Working on his
Ph.D. in criminology, he decided his dissertation would
concentrate on embezzlers. Accordingly, Cressey
arranged the necessary permission at prisons in the
Midwest and eventually interviewed about 200 incar-
cerated inmates. [. . .] Cressey was intrigued by embez-
zlers, whom he called ‘‘trust violators.’’ He was
especially interested in the circumstances that led them
to be overcome by temptation. [. . .] Upon completion of
his interviews, he developed what still remains as the
classic model for the occupational offender. His
research was published in Other People’s Money: A Study
in the Social Psychology of Embezzlement. Cressey’s ?nal
hypothesis was: [see previous section, excerpt from
Cressey, 1953, p. 30]. (Wells, 1997, p. 10)
The transition from Sutherland to Cressey is quite
abrupt in Wells’ depiction of the historical origins of the
?eld’s formal body of knowledge. He also downplays the
role of the social context in Sutherland’s work. Yet in pre-
senting Cressey as one of Sutherland’s doctoral students,
he invokes a sense of progress and continuity in the devel-
opment of criminological knowledge. Importantly, the crit-
icisms that Cressey’s work engendered in the ?eld of
7
In fact, Cressey credits several scholars with authorship of this concept:
not only Edwin Sutherland, but also George Herbert Mead, Herbert Blumer,
Alfred Lindesmith and Charles Wright Mills (see Cressey, 1973, p. viii).
176 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
criminology are not mentioned. Hence the above initial
translation, from criminology to fraud examination, was
fundamentally partial – in both senses of the word (i.e.,
incomplete and biased).
The above excerpt, however, does not mention the term
‘‘fraud triangle.’’ We contacted the ACFE by email concern-
ing the origins of this term and received the following re-
sponse from an ACFE representative:
Dr. Cressey developed the three items, but he did not
call it the Fraud Triangle. Actually, Dr. Wells is the ?rst
person we know of to take the three items and put
[them] in a triangle format. He was working on a video
featuring Dr. Cressey in 1985, and he used a triangle
graphic in the video to illustrate the 3 factors that are
present in most white-collar offenses. He began using
the triangle graphic in training programs after that
time. People saw the graphic and began referring to it
as the Fraud Triangle over the years. So although we
have never undertaken an extensive review of its use,
as far as we know, that’s how it came about.
8
This quotation is noteworthy in several respects. From
practical experience, it is con?dently maintained that the
three factors ‘‘are present in most white-collar offenses.’’
This generalizing attitude may be linked to a systematic
shift from limited empirical cases to a broader label, as
if the original analysis had taken all types of white-collar
crimes into consideration and could, therefore, be general-
ized to every form of fraud. We found a similar tendency
to generalize in other ACFE documents, suggesting that
ACFE representatives are highly con?dent in the knowl-
edge base that allegedly underlies the fraud triangle
concept.
9
The latter also tends to be naturalized in these
documents, as indicated by the capital letters being used
in the last sentence of the excerpt (‘‘Fraud Triangle’’),
implying that the triangle is now understood as a
recognized doctrine, a proven theory or, quite simply, an
institution. Thus, the knowledge base claimed by the ACFE
is presented as universal:
Perceived pressure, perceived opportunity, and ratio-
nalization are common to every fraud. Whether the
fraud is one that bene?ts the perpetrators directly, such
as employee fraud, or one that bene?ts the perpetrator’s
organization, such as management fraud, the three ele-
ments are always present. (Albrecht & Albrecht, 2004, p.
20)
The triangle provides the core elements of the fraud
examination discipline’s body of knowledge. Importantly,
a vast range of enigmas and peripheral questions emerge
when application is taken into account. How is fraud com-
mitted? What mechanisms have been or should be used by
organizations in trying to rein in fraud? How effective are
these mechanisms? One of the most signi?cant questions
is – what kind of individual is more likely to commit fraud?
In the previous excerpt, for example, the main distinction
is between employees – assumed to commit frauds against
the organization – and management – assumed to commit
frauds for the organization. Pro?ling knowledge is enlisted
to address this question. Accordingly, the ACFE developed
categorizations of fraudsters and their acts along various
dimensions. For example, Wells (1997) mobilizes the re-
sults of a large-scale survey of Certi?ed Fraud Examiners
(CFEs), who were asked to provide information on actual
fraud cases. He presents series of graphs (chapter 1), which
collectively associate the imagery of the fraudster to the
pro?le of a married male, for instance. Predictive abilities
are emphasized in the text, through statements such as:
‘‘One of the most meaningful trends of the survey is the di-
rect and linear correlation between age and median loss’’
(Wells, 1997, p. 38).
One key emphasis in the Association’s body of evolving
knowledge is to associate fraud with moral issues. By his
de?nition, Wells (1997, pp. 3-6) assumes that fraud consti-
tutes a dishonest act perpetrated by an individual for per-
sonal enrichment. In other words, fraud is being rooted in
individuals’ frail morality (and not as an effect of broader
sociological and cultural in?uences) and as a problem
necessitating the surveillance of individual ethics by the
organization:
Fraud is a generic term, and embraces all the multifari-
ous means which human ingenuity can devise, which
are resorted to by one individual, to get an advantage
over another by false representations. No de?nite and
invariable rule can be laid down as a general proposi-
tion in de?ning fraud, as it includes surprise, trickery,
cunning and unfair ways by which another is cheated.
The only boundaries de?ning it are those which limit
human knavery. (Albrecht & Albrecht, 2004, p. 5)
This de?nition is centered on individual acts of moral
deviance. One of its most striking features is the use of
derogatory and persecutory language in qualifying these
acts. In a similar way, Wells’ moralizing tone infuses the
series of short cases he provides to demonstrate linkages
between certain behavioral patterns and fraud. Most often,
these cases question the morality of speci?c individuals,
without considering the surrounding network of institu-
tions and social interrelations. For instance, the practice
of background checks, which Wells actively promotes, sin-
gles out a category of individuals as problematic hires (see
also ACFE, 2010, p. 81):
The news that the hospital had unknowingly hired a
convicted felon distressed [the director of internal
auditing in charge of investigating the case of an
employee who regularly overstated the number of
hours on his time sheets]. He discovered that the hospi-
tal’s ability to conduct thorough background checks on
prospective employees was restricted by money and
accessibility to records. [. . .] Harkanell [i.e., the person
who defrauded the hospital] remained at large for sev-
eral months. But luck was on the hospital’s side. Or, per-
haps more accurately, stupidity was on Harkanell’s. Just
as he had done with his time-sheet fraud, he left a clue
8
Email received on May 27, 2011 from a representative of the ACFE. In
2010, Joseph Wells received a Doctorate Honoris Causa from the York
College of The City University of New York, hence the use of the title ‘‘Dr.’’
in the ACFE’s email.
9
See Gabbioneta, Greenwood, Mazzola, and Minoja (2013) for a study of
fraud practitioners’ overcon?dence.
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 177
behind, this time concerning his whereabouts. (Wells,
1997, p. 263)
The overarching ‘‘lesson’’ fromthis example seems to be
that organizations should be reluctant to hire people with
a criminal record, regardless of the circumstances in which
they were convicted. This is reinforced in an article pub-
lished in the ACFE’s newsletter, in which an actual case is
developed through text and video to promote the view that
moral deviants are unlikely to rehabilitate. As stated by the
ACFE president: ‘‘I’ve had fraud perpetrators tell me that it
became an addiction for them. [. . .] Trust equals opportu-
nity – and it is indeed common for a fraudster to perpetrate
a second fraud when they get in a position of trust’’ (Patt-
erson, 2008).
10
From this perspective, moral deviancy con-
stitutes an incurable illness and the best that can be done
in the face of it is to strengthen an organization’s internal
controls to catch fraudsters and place them in the hands of
justice. Our analysis, therefore, points to fraud being concep-
tualized, in the ACFE’s community, from an angle that views
the problem of fraud as one of morality lapses upon which
the organization inescapably needs to intervene.
Thus, from the triangle’s perspective, individual moral-
ity is perceived as a chief source of fraud and the organiza-
tion is presented as having prime responsibilities in
establishing a proper structure to control moral deviancies.
In other words, the triangle provides fraud specialists with
an investigative template that individualizes fraud and
holds organizations responsible for controlling it. As a re-
sult, fraud is circumscribed to the realm of the speci?c:
individuals subjected to pressure and somehow able to
rationalize the act should not be left in a position to commit
fraud. From this perspective, it is incumbent on the organi-
zation to ensure that the three legs of the triangle are prop-
erly overseen through a rigorous structure of internal
control. Fraud is thus constituted as a problem at the con-
?uence of the individual and the organization; it is certainly
not represented as a social, political, or historical problem.
The translations developed in the ACFE community rep-
resent a signi?cant departure from Sutherland and even
from Cressey. For instance, Wells (1997, p. 17) translates
Cressey’s notions of ‘‘position of trust’’ and ‘‘violation of
trust’’ to emphasize the need for systematic controls:
‘‘since [an employee] is in a position of trust (read: no
one is checking) it can be violated.’’ Although Wells
(1997, p. 11) mentions the notion of non-shareable prob-
lem brie?y, this central aspect of Cressey’s hypothesis is re-
placed with the notion of ‘‘pressure.’’ This notion misses a
central element of Cressey’s work whereby a ‘‘sequence of
events’’ is present when a violation of trust is committed
and not present when no transgression is observed (Cres-
sey, 1953, p. 12). Indeed, Cressey resolutely maintains that
people in a position of trust in an organization, who are
subjected to ?nancial pressure for several years, do not vio-
late this trust until their ?nancial problems are felt as non-
shareable.
In addition, Wells (1997, p. 24) relates perceived
opportunity to lack of deterrence by management, as ob-
served through de?cient internal controls. The triangle
also translates ‘‘rationalization’’ in a very speci?c man-
ner. Wells (1997, p. 17) claims that it is part of human
nature: ‘‘once the line is crossed, the illegal acts become
more or less continuous.’’ Overall, in the eyes of the tri-
angle’s proponents, the likelihood of giving in to pressure
characterizes certain groups of individuals. Cressey’s
hypothesis that fraud is ?rst and foremost explained by
individuals’ perceptions is thus replaced by another indi-
vidualizing stance now focused on personality and
morality.
These departures from Cressey’s work are justi?ed by
the age of the original research: ‘‘The study [Cressey,
1953] is nearly half a century old. There has been consider-
able social change in the interim. And now, many antifraud
professionals believe there is a new breed of occupational
offender – one who simply lacks a conscience suf?cient
to overcome temptation’’ (Wells, 1997, p. 20). Wells even
reintroduces ‘‘genetic causes’’ and argues that, in contrast
to white-collar crimes, what he calls ‘‘street crimes’’ are
genetically based (Wells, 1997, p. 9). Wells (1997, p. 24)
further modi?es ‘‘Cressey’s ?nal hypothesis’’ to make the
fraud triangle consistent with ‘‘the fraud scale’’ (see also
Albrecht, Romney, & Howe, 1984, p. 21) where the three
dimensions can offset each other, non-shareable problems
are replaced by situational pressures and rationalizations
by personal integrity. The fraud triangle has thus trans-
lated Cressey’s work into a device to be used in organiza-
tions to measure and intervene on fraud risks associated
with deviant morality.
In summary, our analysis indicates that the creation of
a fraud examination knowledge base entailed substantive
translations from the ?eld of criminology, in that Cres-
sey’s ?ndings are introduced as an indisputable and gen-
eralizable foundation for the practice of fraud
specialization to thrive. The initial translation was meta-
phorically built around the fraud triangle, a concept that
constitutes the hard core of the discipline while providing
enough room for imagination in developing ancillary
translations that extend the scope of the triangle in terms
of technical and application details. From these transla-
tions emerges a broader discourse that de?nes fraud as
a problem that fundamentally relates to malevolent acts
perpetrated by individuals whose morality is at best frail
and at worst nonexistent. Thus, when fraud examiners
talk about systems, the scope is tightly limited to the
boundaries of the organization’s internal control system.
In short, the translations surrounding the fraud triangle
promote a vision that con?dently individualizes fraud to
the point where a stigmatizing judgment sometimes is
readily passed on moral deviants who succumb to ?nan-
cial pressures and make use of an organizational opportu-
nity in order to remorselessly defraud their employing
organization. The latter is rendered accountable in the
process, being enlisted in establishing a proper control
structure around fraudulent risk. As a result, both individ-
ual and organization are likely to share blame when
fraudulent behavior takes place in a given organizational
setting.
10
Patterson (2008) provides video recordings of an individual who, after
serving a sentence for ?nancial fraud, explains that, like an alcoholic, he is
now incurable: this individual asks that he no longer be trusted because he
knows that he will once again betray this trust.
178 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
Building a network of support to naturalize the triangle
Our analysis indicates that the ACFE houses the main
architects of the initial fraud triangle concept. After work-
ing for the FBI for about ten years, Wells started a profes-
sional service ?rm in 1982, specializing in fraud
detection and prevention. Wells founded the ACFE a few
years later, in 1988. The ACFE’s mission is ‘‘to reduce the
incidence of fraud and white-collar crime and to assist
the Membership in fraud detection and deterrence.’’
11
As
of May 2011, the Association comprised over 55,000 mem-
bers (65,000 in April 2013) – with more than 30,000 being
CFEs and the remainder being students and associate mem-
bers.
12
Certi?cation implies passing a compulsory examina-
tion and completing two years in a fraud detection or
prevention-related position. CFEs’ key abilities reportedly
include identifying an organization’s vulnerability to fraud,
examining records to detect and trace fraudulent transac-
tions, conducting interviews to obtain information, and giv-
ing advice on improving fraud prevention and deterrence.
13
The ACFE’s formal body of knowledge comprises a mix of
theoretical, methodological and deontological elements
relating to accounting/auditing, information technology,
criminology, ethics, fraud investigation/schemes, interview-
ing skills, and law.
14
Apparently, CFEs are held in high re-
gard; statements by representatives of Robert Half
International, the U.S. Department of Defense and the U.S.
Government Accountability Of?ce attest to this.
15
The ACFE uses an extensive network of resources to
promote the claim that it possesses a formal body of
knowledge derived from criminology, in the hope of secur-
ing its jurisdiction and, at the same time, legitimizing its
views on the essence of fraud and how it should be con-
trolled. Every year since 1989, the ACFE has bestowed
the Cressey Award ‘‘for a lifetime of achievement in the
detection and deterrence of fraud’’ on a member who best
contributed to ‘‘the ?ght against fraud.’’ The Award is
named ‘‘in honor of one of the country’s foremost experts
on fraud and a founding father of the ACFE, Dr. Donald R.
Cressey’’ (Association of Certi?ed Fraud Examiners (ACFE),
2013).
16
Further, the ACFE organizes annual conferences
with each of the latest ones reportedly attracting over
2000 attendees. Roughly every two years, it publishes an
extensive survey report entitled, Report to the Nation(s),
which draws on information from a large sample of CFEs
to provide an approximation of the cost of fraud in the econ-
omy and detailed knowledge on fraud types and perpetra-
tors. The ACFE also publishes the Fraud Magazine, a
bimonthly publication on white-collar crime and fraud
examination practices, while its website indicates a research
unit comprising nine staff members (May 2011), as well as
22 ‘‘faculty members’’ described as ‘‘some of the most
highly-rated speakers in the anti-fraud profession.’’
17
The
ACFE’s efforts in developing a formal and practically-ori-
ented knowledge base are numerous – for instance through
the creation of the Institute for Fraud Prevention, described
as a ‘‘coalition dedicated to multi-disciplinary research, edu-
cation and prevention of fraud and corruption.’’
18
The ACFE
has been particularly involved in disseminating its represen-
tations in colleges and universities through an ‘‘anti-fraud
education partnership’’ in which institutions are encouraged
to develop a course on ‘‘fraud examination,’’ using extensive
educational material that the ACFE provides free-of-charge.
In 2010, nearly 400 post-secondary institutions worldwide
reportedly took advantage of this opportunity (Carozza,
2010).
Typically, books, articles and documents produced by
Wells and the ACFE are peppered with survey results. This
gives the impression that the fraud examination ?eld is
committed to building a knowledge base predicated on
methodologically rigorous and generalizable knowledge
(as opposed to the production of knowledge focused on
contextualizing). This kind of rhetoric is increasingly
appealing given the emphasis on generality, mobility, com-
parability and standardization in today’s society (Porter,
1995; Reed, 1996). The ACFE has continued and expanded
its categorizing endeavors, producing several Reports to the
Nation(s).
19
In the 2010 Report to the Nations, information
obtained from a sample of CFEs, who documented a total
of 1843 cases of occupational fraud, is presented in numer-
ous graphs and ?gures (ACFE, 2010). One of the most pecu-
liar aspects of the Report is how far claims go to provide a
sense of effectiveness regarding some of the anti-fraud tech-
niques advocated by the ACFE. For instance, the following
excerpt describes a type of effective intervention:
The ability to report fraud anonymously is key because
employees often fear making reports due to the threat
of retaliation from superiors or negative reactions from
their peers. [. . .] One would expect that the presence of
a fraud hotline would enhance fraud detection efforts
and foster more tips. This turns out to be true. As seen
on page [x], the presence of fraud hotlines correlated
with an increase in the number of cases detected by a
tip. In organizations that had hotlines, 47% of frauds
were detected by tips, while in organizations without
hotlines, only 34% of cases were detected by tips. This
is important because tips have repeatedly been shown
to be the most effective way to catch fraud. [. . .] Perhaps
more important, [. . .] organizations that had fraud hot-
lines suffered much smaller fraud losses than organiza-
tions without hotlines. (ACFE, 2010, p. 17)
11
Read on April 12, 2013 on www.acfe.com/who-we-are.aspx.
12
Taken from an e-mail communication with one ACFE’s member
services representative (May 23, 2011).
13
Read on May 25, 2011 on www.acfe.com/documents/press-kit/acfe-
certi?ed-fraud-examiners.pdf.
14
Read on April 12, 2013 on www.acfe.com/self-study-cpe.aspx.
15
Read on May 25, 2011 on www.acfe.com/documents/about-acfe.pdf.
16
It is worth noting that Cressey died in 1987, about one year before the
creation of the ACFE (Wells, 1997, p. 22). According to Wells, Cressey
expressed, during a conversation with him, the idea that ‘‘it was time for a
new type of ‘corporate cop’ – one trained in detecting and detecting the
crime of the future: fraud’’ (Wells, 1997, p. 22).
17
R e a d o n Ma y 2 5 , 2 0 1 1 o n www. a c f e . c o m/ a b o u t /
faculty.asp?copy=faculty.
18
Excerpt from www.theifp.org/ – May 25, 2011.
19
The 2010 Report is the ?rst in the series whose data is drawn from fraud
cases not constrained to the USA – hence the use of the term ‘‘nations.’’ This
suggests that the Association is increasingly involved on the transnational
scenery, along entities such as the International Federation of Accountants
and the International Accounting Standards Board.
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 179
Knowledge on the effectiveness of control mechanisms
is required for sensible intervention to take place, thereby
putting pressure on organizations to adopt such mecha-
nisms – otherwise they may be viewed as negligent. Signif-
icant energy is also devoted to the development of formal
lists of symptoms and other tools designed to help recog-
nize fraud. Diverse categories of symptoms have been
identi?ed: accounting anomalies, extravagant lifestyles,
and a psychologically-predicated category, namely, unu-
sual behaviors:
Research in psychology indicates that when people
(especially ?rst-time offenders, as many fraud perpetra-
tors are) commit a crime, they are overwhelmed by fear
and guilt. These emotions express themselves in an
extremely unpleasant physical response called stress.
Individuals then exhibit unusual and recognizable cop-
ing mechanisms. [. . .] People who are normally nice
become intimidating and belligerent. People who are
normally belligerent suddenly become nice. (Albrecht
& Albrecht, 2004, p. 99)
Coping mechanisms include insomnia, unusual irritabil-
ity, inability to relax, inability to look people in the eyes,
defensiveness, sweating and increased smoking (p. 100).
Consequently, fraud investigators are encouraged to be
alert to any behavioral changes surrounding them. Yet
the art of the skilled examiner is to separate the wheat
from the chaff, which is recognized as being challenging
(Albrecht & Albrecht, 2004, p. 103) given the impact of
unwarranted investigations on the examiner’s reputation
and the professional liability potentially involved:
In putting forward your best efforts to detect fraud,
you’ll be tempted to try too hard sometimes. You will
weigh in your mind whether you should take an unau-
thorized look at the suspect’s bank account; you’ll wres-
tle with the dilemma of whether to secretly check the
fraudster’s credit records. Don’t do it. Overreaching an
investigation or fraud examination is the quickest way
to ruin it. Not only will you be unsuccessful in proving
your case, you will subject yourself to possible criminal
and civil penalties. (Wells, 1997, p. 427)
Following the example of ?nancial auditing (Power,
1994), but perhaps in a more pronounced way, the fraud
expertise discipline supports a climate of suspicion; it is
as if to secure their jurisdiction, fraud specialists seek to re-
mind people, organizational decision-makers especially, of
the threat of fraud being constantly present in their sur-
roundings. The concluding sentence in Wells’ (1997, p.
528) book is particularly revealing in this respect: ‘‘And
since most people don’t start their careers to become liars,
cheats, and thieves, it is the fraud examiner’s job to ensure
they do not end up that way.’’ That is, there is a potential
for everyone to become a fraudster if the surrounding con-
ditions, especially those within the organization, are con-
ducive to this type of behavior. In a similar way:
Past research has shown that anyone can commit fraud.
Fraud perpetrators usually cannot be distinguished
from other people by demographic or psychological
characteristics. Most fraud perpetrators have pro?les
that look like those of other honest people. (Albrecht
& Albrecht, 2004, p. 18)
Such generalizing statements, however, mix with risk
pro?ling statements in ACFE’s discourse. Fraud risk is both
widespread and related to certain categories of people.
Probabilistically, everyone is tied to some likelihood of
committing fraud – yet it appears that the likelihood is
higher for certain pro?les. As such, the categorizing
schemes institutionalized in the discipline emphasize the
threat of speci?c categories of individuals more likely to
act in immoral ways: former prisoners, drug users, gam-
blers, etc. Suspicion is, therefore, especially targeted to-
wards certain categories of individuals, re?ecting some
deeply-ingrained beliefs that have historically stigmatized
certain groups in society (Goffman, 1963). Further, some
data points to speci?c categories of employees as being
more likely to be involved in fraudulent cases, while indi-
rectly suggesting that fraud risk permeates every organiza-
tion since these categories apply everywhere:
The six most common departments in which fraud per-
petrators worked were accounting, operations, sales,
executive/upper management, customer service and
purchasing. Collectively, these six departments
accounted for 77% of all cases reported to us. As the
chart on the following page illustrates, the distribution
of cases based on the perpetrator’s department was
remarkably similar to the distribution in our 2010
study. (ACFE, 2012, p. 51)
The general impression that emerges from the material
we analyzed is one of doubt and wariness – that every em-
ployee, citizen or corporation might harbor wrongdoing.
Fraud, as conceptualized through the lens of the fraud
triangle and its intellectual rami?cations, can occur every-
where. Yet some individuals are riskier than others. This is
why, as the rhetoric goes, fraud can be everywhere;
‘‘abnormal’’ gestures or words should be construed as
symptoms of fraud. Along these lines, Wells (1997, p.
511) weaves wider webs of suspicion:
The cases we have seen on the preceding pages were, by
and large, on the extreme edge of abusive conduct by
employees. In short, this data is merely the tip of the
iceberg. How deep and massive that iceberg is varies
from one organization to another, depending on a com-
plex set of business and human factors. [. . .] Obviously
the more rules within the organization, the more
employees are likely to run afoul of them. [. . .] Tom R.
Tyler, in his book Why People Obey the Law concluded
overwhelmingly that individuals obey only laws they
believe in. If a rule makes no sense to the employees,
they will make their own.
In the above quotation, Wells employs a series of per-
suasive tactics in arguing that fraud constitutes a massive
organizational problem that must be addressed. The meta-
phor of the iceberg is interesting, since it surrounds fraud
with images of vastness and uncertainty. The clear-cut
tone Wells uses is also noteworthy: employees will
undoubtedly tend to break rules that do not make
sense to them, if they have the opportunity to do so. This
180 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
uncompromising assertion is authoritatively supported
with a reference to a book written by an academic (Tyler,
2006) specializing in psychology and law. Consistent with
this stance, organizations that are passive in terms of
implementing specialized approaches and recipes aimed
at controlling the risk of fraud are ?rmly criticized with
the bene?t of hindsight and wisdom:
If there is a lesson to be learned here, it is that audit
functions are in place for a reason and should never
be overlooked. Unfortunately for the [defrauded] chari-
table organization, they were reminded of this lesson
the hard way. (Wells, 1997, p. 156)
Not only does the triangle offer a scheme to explain
why fraud is committed, but it also provides a basic tem-
plate for intervention – thereby rendering the organization
responsible for establishing a proper internal control struc-
ture. The following metaphorical analogy explicitly estab-
lishes a central linkage between fraud explanation and
intervention:
Fraud resembles ?re in many ways. For a ?re to occur,
three elements are necessary (1) oxygen, (2) fuel, and
(3) heat. These three elements make up the ‘‘?re trian-
gle,’’ [. . .]. When all three elements come together, there
is ?re. Fire?ghters know that a ?re can be extinguished
by eliminating any one of the three elements. [. . .] As
with the elements in the ?re triangle, the three ele-
ments in the fraud triangle are also interactive. With
?re, the more ?ammable the fuel, the less oxygen and
heat it takes to ignite. [. . .] With fraud, the greater the
perceived opportunity or the more intense the pressure,
the less rationalization it takes to motivate someone to
commit fraud. [. . .] People who try to prevent fraud usu-
ally work on only one of the three elements of the fraud
triangle – opportunity. Because fraud-?ghters generally
believe that opportunities can be eliminated by having
good internal controls, they focus all or most of their
preventive efforts on implementing controls and ensur-
ing adherence to them. (Albrecht & Albrecht, 2004, pp.
20-21)
One of the key implicit messages in the above excerpt is
to make the organization accountable for reining in the risk
of fraud. As any responsible community cannot leave ?re
unattended, any responsible organization must establish
a proper structure of control around fraud; a failure to do
so is bluntly viewed as carelessness. In this way, fraud spe-
cialists promote the obvious necessity of their expertise,
which is presented as making a difference in dealing with
problems that can have dire consequences on the negligent
organization. It should not be surprising, then, to see fraud
examination being highlighted as a growing career
opportunity:
As the number of frauds and the amounts of fraud
losses increase, so do the opportunities for successful
careers in fraud-?ghting. In fact, just recently, U.S. News
and World Report identi?ed fraud examination as one
of the fastest growing and most ?nancially rewarding
careers. The American Institute of Certi?ed Public
Accountants recently touted fraud examination/fraud
auditing as one of the six fastest growing and most prof-
itable opportunities for accountants (Albrecht & Albr-
echt, 2004, pp. 13-14).
Further, the ACFE maintains that to establish a proper
control structure, the organization should set up an appro-
priate ‘‘control environment’’:
Having an effective control structure is probably the
single most important step organizations can take to
prevent and detect employee fraud. [. . .] The control
environment is the work atmosphere that an organiza-
tion establishes for its employees. The most important
element in an appropriate control environment is man-
agement’s role and example. There are numerous
instances in which management’s dishonest or inappro-
priate behavior was learned and then modeled by
employees. (Albrecht & Albrecht, 2004, p. 27)
The emphasis on control environment is presented as
being experientially supported. The bar is set very high
for top managers, who should ensure not only that
appropriate control mechanisms are established
throughout the organization, but that they behave
appropriately at all times. Any temporary deviance from
the dominant set of moral prescriptions is viewed as
having the potential to engender dire cultural conse-
quences, given the presumed behavioral isomorphism
?owing from top to bottom in the organization. The
point is that considering control issues seriously and
meticulously is a key attitude that top managers should
manifest at all times.
One of the key points to retain from our analysis thus
far is that, by formulating a knowledge claim grounded
in what is represented as uncontroversial, fraud specialists
legitimize and disseminate a peculiar discourse about
what fraud is, what its causes are, and who is responsible
for controlling it. The triangle is represented as the core
of fraud examination expertise, surrounded with a constel-
lation of applied knowledge re?nements to ensure that
fraud examination expertise can be meaningfully used in
concrete situations. This constellation is always under
development, consistent with the image of a discipline that
genuinely aims for continuous progress in its quest to
dominate fraud. It focuses on character traits of perpetra-
tors, probabilities associated with fraud risk, and control
mechanisms to be implemented within organizations.
One of the main emphases is that the fraud problem can,
and should, be controlled by the organization through
the implementation of well-tried anti-fraud techniques –
although the limitations of fraud control are sometimes
prudently recognized in ACFE rhetoric, perhaps in an at-
tempt not to set the audiences’ expectations of effective-
ness at an excessively high level:
The dream of many in the accounting community is to
develop ‘‘new’’ audit techniques which will quickly
and easily point the ?nger of suspicion. To those inno-
cent souls, good luck. Regardless of the ability of com-
puters to automate a great deal of drudgery, there are
no new audit techniques, and there haven’t been any
for the last several centuries. (Wells, 1997, p. 526)
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 181
The chains of translations produced around the fraud
triangle thus attempt to build a network of support around
a notion of fraud highlighting the responsibility of individ-
ual morality and the necessity to build vigilant organiza-
tions. In the next section, we examine how this network
subsequently escaped the limits of fraud examination
and colonized other ?elds of intervention.
Moving downstream in the chain of translations:
extending the network
Intermingling with the AICPA
The fate of any claim, including knowledge claims, lies
in others’ hands (Latour, 1987). The ACFE’s claim to exper-
tise, grounded in the imagery of the triangle, spread be-
yond its con?nes, thus extending the chain of
translations to surrounding communities. In particular,
the following auditing standards were inspired by ACFE’s
work, although none of them explicitly mentions the
‘‘fraud triangle’’: Statement on Auditing Standards 99,
‘‘Consideration of Fraud in a Financial Statement Audit,’’
introduced by the AICPA to replace SAS 82 after the intro-
duction of the Sarbanes-Oxley Act in the United States
(American Institute of Certi?ed Public Accountants (AIC-
PA), 2002); and International Standard on Auditing 240,
‘‘The Auditor’s Responsibilities Relating to Fraud in an
Audit of Financial Statements’’ (IFAC, 2006).
20
In these standards, ‘‘fraud risk factors’’ are grouped in
three ‘‘conditions that indicate incentives/pressures to per-
petrate fraud, opportunities to carry out the fraud, or atti-
tudes/rationalizations to justify a fraudulent action’’
(AICPA, 2002, paragraph 31, p. 16; see also IFAC, 2006, par-
agraph 24, section A25, p. 174). As in Wells’ writings
(1997), the non-shareable ?nancial problem has disap-
peared and been replaced by an incentive or pressure to
commit fraud, while the notion of rationalization is linked
with that of attitude, thus shifting closer to the idea of indi-
vidual morality:
Three conditions generally are present when fraud
occurs. First, management or other employees have an
incentive or are under pressure, which provides a reason
to commit fraud. Second, circumstances exist—for
example, the absence of controls, ineffective controls,
or the ability of management to override controls—that
provide an opportunity for a fraud to be perpetrated.
Third, those involved are able to rationalize committing
a fraudulent act. Some individuals possess an attitude,
character, or set of ethical values that allow them to
knowingly and intentionally commit a dishonest act.
However, even otherwise honest individuals can com-
mit fraud in an environment that imposes suf?cient
pressure on them. The greater the incentive or pressure,
the more likely an individual will be able to rationalize
the acceptability of committing fraud. (AICPA, 2002,
paragraph 7, p. 8)
Readers may ?nd this translation of Wells’ work by the
AICPA (and the International Federation of Accountants –
IFAC) rather surprising. To begin with, the transposition
to accounting fraud is not questioned:
Even if Cressey’s ?ndings for embezzlers were valid,
there is little evidence to support the fraud triangle as
a general theory of ?nancial crime. The convoluted con-
nection between Other People’s Money and SAS No. 99
suggests that the endorsement of the fraud triangle by
the AICPA occurred without serious consideration of
other criminology perspectives. (Donegan & Ganon,
2008, p. 3)
Second, in contrast with Cressey (1953) giving less
weight to ‘‘opportunity,’’ the notion that is central for both
the AICPA and IFAC is, indeed, that of opportunity, whose
dimensions are close to those of internal control. Third,
replacing the concept of a non-shareable ?nancial problem
with those of incentive and pressure means that the iden-
ti?cation of factors that may have led the individual to
commit fraud, is pushed even further into the background.
The notion of incentive is based on the idea that the fraud-
ster has ‘‘a reason to commit fraud.’’ Finally, rationalization
is overshadowed by an attitudinal stance that is prone to
committing fraud: individuals with a ‘‘character or set of
ethical values which allow them to knowingly and inten-
tionally commit a dishonest act.’’ This reintroduction of
moral traits, anchored relatively permanently in the iden-
tity of individuals, as an explanation for fraudulent behav-
ior is far removed from the spirit of many writings in
criminology, including those of Cressey and Sutherland.
This rede?nition of the three branches of fraud identi-
?ed by Cressey allows us to better understand the defor-
mation mechanisms at work in the translation of
criminology research, such as it was redeployed in the
fraud examiner and auditing community. The notion of a
non-shareable ?nancial problem has been replaced with
those of incentive and pressure, and perception of opportu-
nity with a failure in internal controls. These changes are
not only a matter of replacing subjective, hard-to-observe
elements with procedures in documentation and measure-
ment that have already been mastered and put in place;
they also imply subjecting any effort to understand the
causes of fraud to the will to manage the related risks.
Cressey’s causal view has been abandoned in favor of the
notion of risk.
For example, in their appendices the two standards pro-
vide examples of risk factors for fraud that are very similar
to what was presented in previous standards, but this time
they are organized systematically according to the three
dimensions of the triangle. They are also separated into
two parts: the ‘‘risk factors relating to misstatements aris-
ing from fraudulent ?nancial reporting’’ (AICPA, 2002, pp.
44–48; IFAC, 2006, pp. 186–189) and the ‘‘risk factors
relating to misstatements arising from misappropriation
of assets’’ (AICPA, 2002, pp. 48–50; IFAC, 2006, pp. 189–
191). The former concern accounting fraud and can be
attributed more to the behavior of top managers, whereas
20
This is not the only in?uence that Cressey had on auditing practices: he
also participated (with Charles Moore) in a study commissioned by Peat
Marwick & Mitchell whose ?ndings, submitted in 1980, underscored the
importance of ‘‘tone at the top’’ (Cressey & Moore, 1983).
182 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
the latter concern individuals or groups of individuals who
defraud their employer for their own bene?t; these are
what Cressey (1953) calls embezzlement. The incentives
identi?ed for accounting fraud relate to the highly compet-
itive environment of the organization, the pressure faced
by managers to reach ?nancial targets and the ?nancial
stake that executives may have in their organization.
Opportunities relate to the complexity and lack of trans-
parency in the organization’s operations and to de?cien-
cies in internal controls. Rather tricky to observe, the
attitude of management may be evaluated by examining
its level of commitment and communication on ethical val-
ues, the attention paid to short term results and its ten-
dency to commit to unrealistic ?nancial forecasts.
21
As stated in the standard, ‘‘fraud risk factors do not nec-
essarily indicate the existence of fraud; however, they of-
ten are present in circumstances where fraud exists’’
(AICPA, 2002, paragraph 31, p. 16; see also IFAC, 2006,
paragraphs A23–A27, p. 161).
22
Like the symptoms of a dis-
ease, the presence of risk factors implies that one must be
conscious of the possibility of fraud, even though no causal
relationship can actually be established between fraud and
the underlying risk factors. Since risk, by de?nition, can
materialize anytime, the standards tend to promote a cli-
mate of suspicion justifying the reinforcement of organiza-
tional surveillance.
Our analysis also indicates connections between the
ACFE and auditing standard setters. Indeed, Wells partici-
pated in drafting an ‘‘exhibit’’ (‘‘Management Antifraud
Programs and Controls. Guidance to Help Prevent, Deter,
and Detect Fraud’’) associated with SAS 99 (AICPA, 2002,
pp. 57–77) and issued jointly by different associations,
including the ACFE. Further, SAS 99 recommends calling
in fraud examiners – identi?ed as key participants in the
antifraud effort – to work with the organizations’ adminis-
trators and auditors (AICPA, 2002, pp. 59; 76). This alliance
between two associations must be placed within the con-
text of the ?nancial scandals of 2001–2002:
When the AICPA belatedly recognized the need to con-
sider why so many accountants were committing fraud
they turned to the ACFE, which, in effect, meant
embracing Cressey’s perspective. Adopting the program
of a group of dedicated fraud ?ghters was doubtlessly a
useful way to burnish the profession’s tarnished image
in 2002. The triangle had the added advantage of
explaining fraud as the action of a loner driven by need,
taking advantage of a lack of internal control. Thus the
deterrent to fraud was more internal control, and the
search for the culprit could focus on individual offend-
ers, not on the culture that may have encouraged and
rewarded their actions. (Donegan & Ganon, 2008, p. 3)
Perhaps as a partial result of its endorsement by the
AICPA, the fraud triangle notion, which was practically
non-existent in the press until 1999 (Factiva database),
gained visibility after the 2001–2002 ?nancial scandals
(see Table 1). The same happened to the acronym ACFE
and the expression ‘‘fraud examiner(s),’’ both became
increasingly well-known, especially from 2002 onward.
One strength of the triangle is found in its ability to inter-
est heterogeneous audiences; CFEs were using it to expand
their professional jurisdiction, while accounting and audit-
ing professional associations were trying to reassert,
through the triangle, their legitimacy as guardians of trust
after accounting fraud scandals. Although these groups
arguably had different views on how and why to use the
fraud triangle, they shared an interest in promoting it
and its underlying vision of fraud.
All in all, it appears that the turning point in the early
2000s created a context that was favorable to an increased
use of the fraud triangle. As such, our analysis indicates
that the triangle has become an important concept in
establishing jurisdiction over fraud and in making the
organization responsible for the control of its members’
moral deviancies. Of course, instances of triangle use are
not limited to mere diffusion; the chains of translations ex-
tended beyond the ACFE community. Now, we trace, in
more detail, the web of downstream translations, using
the 64 articles that we identi?ed (mostly in academic/edu-
cational journals but also in a number of professional and
hybrid journals) – as speci?ed in our research methods
section.
Justifying the emphasis on internal control
A number of recent articles incorporate the fraud trian-
gle within the core of their argument. Some articles aim to
Table 1
Number of documents referring to the fraud triangle.
Year(s) Fraud triangle
a
Fraud examination
b
1979–1993 1 148
1994 0 68
1995 0 92
1996 1 94
1997 2 123
1998 2 199
1999 2 197
2000 5 210
2001 6 202
2002 9 369
2003 12 400
2004 11 473
2005 10 488
2006 16 502
2007 17 552
2008 21 624
2009 39 878
2010 39 817
2011 49 1092
Total 242 7508
a
Results of a query sent to the Factiva database, without specifying any
source, for the exact term ‘‘fraud triangle’’.
b
Results of a query sent to the Factiva database, without specifying any
source, using the request ‘‘fraud examiner OR fraud examiners OR ACFE’’.
21
We see here how auditing standard-setting bodies translate the
triangle into ‘‘actionable’’ knowledge which gives them power over reality.
Through various problematization and categorization processes, profes-
sional associations produce a normative tool that creates and solidi?es
areas of intervention for their members.
22
IFAC’s formulation is slightly different: ‘‘While fraud risk factors may
not necessarily indicate the existence of fraud, they have often been present
in circumstances where frauds have occurred.’’
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 183
explain and illustrate fraud triangle dimensions to auditing
and accounting professionals (Buckhoff, 2001; Conley,
2000; Durbin, 2006; Holzinger, 2010; Murdock, 2008; Pet-
erson & Zikmund, 2004; Ramos, 2003). Others provide case
studies for teaching future auditors or managers (Bailey,
2004; Clayton & Ellison, 2011; Fleak, Harrison, & Turner,
2010; Howe & Malgwi, 2006; McKnight, Manly, & Carr,
2008; Michelman, Gorman, & Trompeter, 2011; Peterson
& Gibson, 2003). Several draw heavily from the fraud trian-
gle when elaborating their conceptual framework (Cohen,
Ding, Lesage, & Stolowy, 2010; Murphy, 2012; Murphy &
Dacin, 2011; Srivastava, Mock, & Turner, 2007, 2009; Stu-
ebs & Wilkinson, 2010; Wilks & Zimbelman, 2004). In so
doing, these studies borrow the de?nition of their core
concept and dimensions to be used in their categorization
work from a professional organization. Some studies also
posit that fraud triangle dimensions can predict the pres-
ence of fraud within an organization (Cohen et al., 2010;
Murphy, 2012; Murphy & Dacin, 2011; Wilks & Zimbel-
man, 2004). A number of these articles tend to naturalize
the fraud triangle, whose basic principles and assumptions
are not questioned.
However, empirical tests of the practical effectiveness
of the fraud triangle model and of its descriptive quality
are, to our knowledge, scarce and unconvincing (e.g.,
Strand Norman, Rose, & Rose, 2010; Wilks & Zimbelman,
2004). Some scholars sought to compare the performance
of undergraduate business students, who received training
on the fraud triangle, to those that received training on the
COSO model (Hansen & Peterson, 2010; LaSalle, 2007), but
their ?ndings are not conclusive. Wilks and Zimbelman
(2004) show that the triangle is only effective (for external
auditors) in cases where risk is perceived to be low, while
Strand Norman et al.’s (2010) results indicate that the use
of the triangle by internal auditors does not improve the
assessment of fraud risk.
Other articles draw on the fraud triangle, but modify
its terms. Most of them use the ACFE and AICPA terminol-
ogy rather than Cressey’s; the notion of a non-shareable
problem almost never appears. Pressure, motive or need
(e.g., Fitzsimons, 2009; Murdock, 2008) usually replace
it. Some of these shifts are more signi?cant than others.
For example, Rae and Subramaniam (2008) replace pres-
sure and rationalization with the notion of organizational
justice, whose absence incites fraudsters to act and legit-
imize their actions. The vast majority of authors replace
opportunity with the effectiveness of internal control
(Albrecht, Albrecht, & Albrecht, 2004, 2010; Alleyne &
Howard, 2005; Clayton & Ellison, 2011; Fleak et al.,
2010; Hillison, Pacini, & Sinason, 1999; Kelly & Hartley,
2010; Peterson & Gibson, 2003; Rae & Subramaniam,
2008; Ravisankar, Ravi, Raghava Rao, & Bose, 2011;
Srivastava et al., 2009; Strand Norman et al., 2010) and
rationalization with the morality of the organization’s
members (Albrecht, Turnbull, Zhang, & Skousen, 2010;
Cohen et al., 2010; Hillison et al., 1999; Jones, 2010;
Martin, 2007; Rae & Subramaniam, 2008; Ramos, 2003;
Srivastava et al., 2007, 2009). Ultimately, it seems that
the triangle is often employed as a mechanism to catego-
rize the information traditionally analyzed by auditors
along three large blocks.
Surprisingly, many articles draw on the fraud triangle,
but neglect some of its dimensions. This neglect is some-
times justi?ed through the explanation that one or another
of the dimensions is easier to control (Buckhoff, 2001; Jans,
Lybaert, & Vanhoof, 2010) or that the three branches of the
triangle are correlated with each other (Albrecht et al.,
2010, p. 264).
23
A number of researchers focus on the least
original dimension of the model (at least according to Cres-
sey) – that of opportunity and, as a result, the discussion
centers on the theme of internal control:
In the author’s experience as a fraud investigator, where
there is opportunity we usually ?nd fraud. (Buckhoff,
2001, p. 73)
Everyone experiences pressures, and everyone ratio-
nalizes. Thus, everyone is a walking-around two-
thirds fraud triangle. [. . .] The simplest way to abolish
fraud, then, is to eliminate opportunity. (Messina,
1997, p. 37)
The importance of opportunity is stressed by Cressey’s
fraud triangle [. . .] with opportunity being the only
element of fraud risk that an employer can in?uence.
Two other elements that raise fraud risk, rationaliza-
tion and incentive, are personal characteristics.
Because a business has little if any control over these
elements, they are not considered in this study. (Jans
et al., 2010, pp. 19-20)
Again, it is assumed: a) that fraudis committedbyindivid-
uals lacking inmorality; andb) that the organization’s dutyis
to establish credible layers of control to ensure that moral
deviancies do not happen or, at least, are detected in a timely
manner. Other authors view the triangle as interesting, but
limited and needing to be enhanced. Wolfe and Hermanson
(2004), for example, propose adding a fourth dimension –
the capability to commit fraud – to make a ‘‘fraud diamond’’
(see also Dorminey, Fleming, Kranacher, & Riley, 2010;
McKnight et al., 2008).
24
Others prefer to combine the
triangle with a theory, such as attribution theory (Wilks &
Zimbelman, 2004) or ‘‘routine activity theory’’ (Ramamoorti,
2008), inresponsetothe perceivedlimitations of the fraudtri-
angle model. Most often, these authors contend that the main
dimension concerns internal control procedures.
In sum, our analysis brings to the fore the complexity of
the chains of translations that have developed following
the fraud triangle’s conceptualization. A number of aca-
demics and practitioners have been working to de?ne the
explanatory potential of the model, to improve it, or to of-
fer instruction in its practical use. On this basis, it can be
argued that the triangle lays the groundwork for a paradig-
matic range of enigmas, in the sense attributed to Kuhn
(1970), where the members of a community, who share
23
The claim of correlation moves us even further away from Cressey’s
work. On the contrary, Cressey sought to demonstrate that each dimension
is insuf?cient by itself and that acts of fraud are only committed when all
three dimensions are present.
24
In fact, this dimension is present in Cressey’s de?nition of opportunity.
In it, he includes the skills that a person would need to violate trust
(Cressey, 1953, p. 29). However, this fourth dimension is consistent with a
view whereby opportunity is not linked to a position of trust but to the
ability to evade internal control procedures.
184 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
certain values (in this case, an interest in the triangle), seek
to better de?ne its nature and improve its predictive po-
tential. As long as the paradigmatic foundations of the tri-
angle are not called into question, there is a suf?ciently
credible knowledge base available that can be used to
legitimately intervene in the ?eld and experiment in trying
to re?ne the triangle’s knowledge extensions. Indeed, all
these uses of the fraud triangle, as well as the proposed
improvements, seem to associate the appearance of acts
of fraud with weaknesses in organizational surveillance
practices, thereby providing a point of support to secure
the jurisdictional legitimacy of those able to apply hybrid
criminological-accounting knowledge.
One central prescriptive point ensuing from this body of
knowledge is that organizational controls must be system-
atically applied as a result of suspicion towards individual
morality. In other words, the fraud triangle has been har-
nessed as a tool, in the service of practitioners and theo-
rists, to promote a branch of knowledge that views fraud
at the juncture of an individual and organizational
problem.
Demonizing the ethical abnormalities of speci?c individuals
While the vast majority of the articles we inventoried
focus on questions of internal control, a number of them
deal with the other dimensions of the triangle, which are
usually mentioned to enumerate a few characteristics that
are depicted as being speci?c to fraudsters. Apparently,
this not only helps in the identi?cation of fraud, but, more
importantly, facilitates prevention by means of spotting
potential fraudsters. Most of these characteristics are
behavioral and relate to the fraudsters’ psychology. For
instance,
Not surprisingly, all three elements of the fraud triangle
are in?uenced by the fraud perpetrators’ psychology.
After all, personal incentives and perceived pressure
drive human behavior, and the need to rationalize
wrongdoing as being somehow defensible is very much
psychologically rooted in the notion of cognitive disso-
nance. To some extent, even the assessment of opportu-
nity—including the relatively low likelihood of being
caught—depends on the perpetrator’s personal, behav-
ioral calculus. (Ramamoorti, 2008, p. 525)
Echoing the type of concerns expressed originally
through the ACFE, several scholars maintain that a recur-
ring motive for committing fraud stems from ?nancial dif-
?culties brought on by an inappropriate lifestyle.
According to these authors, fraudsters are often people
with a ‘‘gambling problem’’ who want to ‘‘enjoy a comfort-
able lifestyle’’ (Albrecht et al., 2010; Alleyne & Howard,
2005; Buckhoff, 2001; Durbin, 2006; Grossman, 2003; Hil-
lison et al., 1999; Howe & Malgwi, 2006; Kelly & Hartley,
2010; McKnight et al., 2008; Murdock, 2008; Peterson &
Gibson, 2003; Ravisankar et al., 2011). The emphasis on
employee lifestyle is particularly alluring to those actors
who endeavor to spot potential fraudsters, because these
behavioral characteristics can be observed as long as one
possesses the necessary know-how (Wells, 1993, pp. 93–
94). It is also very consistent with a moral view that frowns
on gambling and the desire to live beyond one’s means.
Accordingly, in the eyes of these authors, fraud is often
committed by people af?icted with a de?cient morality,
who do not conform to the authors’ lifestyle ideal – that
of a hard-working, frugal individual who is always ready
to report any deviation from the norm that may occur in
her/his circle:
Individuals who are honest always do the right thing
and represent the lowest fraud risk. When an unex-
pected ?nancial need arises, they work overtime, hold
multiple jobs, reduce their expenses, and seek help
from friends and family. They are driven by high moral
values and address setbacks as challenges to overcome.
When honest individuals identify control weaknesses,
they tend to notify their managers, become whistle-
blowers by calling the ethics hotline, or con?de in an
internal auditor, compliance of?cer, ombudsperson, or
legal counsel. (Murdock, 2008, p. 83)
The above quote illustrates the moralizing, black-and-
white view that underlies certain discourses on fraud. In
fact, many authors assert that fraud is linked to de?cient
ethics on the part of the fraudster.
25
They draw a distinction
between ‘‘normal’’ and ‘‘pathological’’ and describe the psy-
chological traits that they consider typical of fraudsters. One
of the main limitations to this research lies in identifying
psychological traits that some fraudsters possess without
testing whether they are generalized and without verifying
that these traits appear more often than in the general
population.
26
Apart from weaknesses in internal control, the main
cause of fraud mentioned by the authors, therefore, relates
to de?ciencies in the morality of individuals (Albrecht
et al., 2010; Cohen et al., 2010; Grossman, 2003; Hillison
et al., 1999; Holton, 2009; Jones, 2010; Kidder, 2005; Mar-
tin, 2007; Murdock, 2008). Quite simply, Cohen et al.
(2010) explain fraud by a lack of ethics among managers.
In the words of Dorminey et al. (2010, p. 20), ‘‘violations
of ethics, trust, and responsibility are at the heart of fraud-
ulent activities.’’ Auditors are then urged to assess the
morality of individuals:
Our article suggests that regulators should place greater
consideration on ethics in the of?cially promulgated
auditing standards in order to enhance the ability of
auditors to be more effective in detecting corporate
fraud. (Cohen et al., 2010, p. 272)
Auditors need to consider an important aspect of people
who commit fraud: their character. Individuals bring to
organizations elements of their upbringing, culture, and
ethical and moral beliefs. These three elements are the
foundation of people’s attitudes and the key ingredients
determining their character. The elements are placed
25
This is particularly apparent in the operationalizations of ‘‘rationaliza-
tion’’ (see especially Howe & Malgwi, 2006, pp. 28–29). This is taken to
extremes when the authors use this variable to link fraud to certain
national stereotypes which are discreetly concealed under the term
‘‘cultural rationalizations’’ (Albrecht et al., 2010, pp. 263–265).
26
From a critical angle, it is the entire set of assumptions underlying the
descriptions of ‘‘typical fraudsters’’ that is revealing – not of the fraudsters’
pro?le, but of the fraud theorists’ beliefs.
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 185
along a moral continuum that classi?es people as hon-
est, situational/potential, or dishonest. (Murdock,
2008, p. 82)
[Auditors] need to understand, assess, and respond to
the ethics of prospective and current clients. (Martin,
2007, p. 5)
Fraud is sometimes associated with a neurotic person-
ality, that of the pathological fraudster or predator (Dormi-
ney et al., 2010), the higher Machiavellian (Murphy, 2012),
the industrial psychopath (Ramamoorti, 2008) involved in
vice-related activities (Hillison et al., 1999, p. 353) or the
pathological gambler (Kelly & Hartley, 2010). This associa-
tion is justi?ed theoretically using Cressey’s work, but by
replacing the concept of rationalization with that of dis-
honesty or by associating it with a lack of integrity or per-
sonal ethics (Albrecht et al., 2004; Buckhoff, 2001;
Loebbecke, Eining, & Willingham, 1989; Rae & Subraman-
iam, 2008; Srivastava et al., 2007; Srivastava et al., 2009).
This permutation, which is present in SAS 99 (AICPA,
2002; Ramos, 2003) and ISA 240 (IFAC, 2006), seems to as-
sume that individuals with dubious ethics are more likely
to rationalize a fraudulent act, which is however not con-
sistent with Cressey’s argument. In sum, the above scholars
emphasize the morality of organization members and as-
sume that it is possible and necessary to distinguish indi-
viduals with acceptable and strong morals from those
lacking in personal ethics.
27
To conclude, one could argue that the a priori identi?ca-
tion of psychological traits as likely to lead to dishonest
acts seems to have more to do with prejudice than rea-
soned observation. Accordingly, the disapproval of trans-
gressive behaviors and the association of these behaviors
with risky personalities or characters, as found in the
mainstreamliterature on the fraud triangle, are legitimized
by the choice of examples that are suf?ciently egregious as
to be condemned almost unanimously. Very few authors,
following Sutherland (1983) for example, adopt a more
sociological view of fraud. Of the articles in our dataset,
only Donegan and Ganon (2008) and Free, Macintosh,
and Stein (2007) consider acts of fraud to be caused by
societal pressures and contexts which favor the emergence
of particular cultures.
Promoting suspicion
Most articles we inventoried use the fraud triangle to
justify an association between the problem of fraud and
an array of organizational solutions (‘‘better’’ internal con-
trol), thereby promoting the intervention of auditors (and,
to some extent, that of fraud examiners) in the domain of
fraud prevention and detection. This professional claim is
supported with ambiguous rhetoric, which can be quite
effective in securing professional work (Alvesson, 1993).
The rhetoric follows a two-part argument. First, the risk
of fraud is high because fraud is widespread and its conse-
quences are particularly serious. Second, auditors’ compe-
tencies are most useful in combating fraud within
organizations, because internal control is the most man-
ageable dimension of the fraud triangle.
28
In particular, this
professional rhetoric is predicated on the presence of a siz-
able risk. Many articles begin with a reminder of the ?gures
published by the ACFE that tend to present fraud as frequent
and widespread (Aguilera & Vadera, 2008; Albrecht et al.,
2004; Conley, 2000; Murdock, 2008; Murphy, 2012; Peter-
son & Zikmund, 2004; Srivastava et al., 2009). These ?gures,
based on CFEs’ ‘‘educated guesses’’ (Wells, 1997, p. 34), are
presented in ways that convey a sense of magnitude and ur-
gency to react:
Survey participants estimated that the typical organiza-
tion loses 5% of its annual revenue to fraud. Applied to
the estimated 2009 Gross World Product, this ?gure
translates to a potential total fraud loss of more than
$2.9 trillion (ACFE, 2010).
29
On this basis, the intervention of auditors and fraud
examiners would seem to be both necessary (the risk must
be addressed) and cost-effective (the fees may be high, but
they are negligible as compared to the cost of certain fraud
cases). This conclusion is particularly visible in the case
studies used to teach the assessment of fraud risk and
the fraud triangle conceptualization to undergraduate stu-
dents. The vast majority of these case studies frame their
questions along a relatively traditional evaluation of inter-
nal control systems (Brucker & Rebele, 2010; Clayton &
Ellison, 2011; Fleak et al., 2010; Howe & Malgwi, 2006;
Michelman et al., 2011; Peterson & Gibson, 2003). The nar-
ratives found in these cases provide important clues to the
assumptions made by the authors. For example, they often
portray a person who seems to be ‘‘completely normal’’
and above suspicion until repeated acts of fraud are discov-
ered (Clayton & Ellison, 2011; McKnight et al., 2008; Mich-
elman et al., 2011; Peterson & Gibson, 2003). It is only
when the person is caught that some suspicious behavior
is discovered (a gambling habit, an excessive appetite for
expensive clothes and luxury cars, etc.). This narrative,
whose purpose is to make a case for increased organiza-
tional controls (and which is also the opportunity to show
students why organizations should hire auditors and CFEs;
see for example Clayton & Ellison, 2011), implies that any
apparently ‘‘ordinary’’ individual can commit fraud.
30
The
feeling of widespread suspicion that these writings encour-
age is reinforced by the organizations they describe: a small
charitable organization (Fleak et al., 2010), a regional high
school (Howe & Malgwi, 2006), a municipal facility for
sporting events and concerts (Brucker & Rebele, 2010), a
27
Scott and Jehn (2003) nuance this point by showing that evaluating a
dishonest act can be tricky.
28
While the vast majority of articles employ this argument, some of them
also recommend the intervention of fraud examiners. In general, the
articles emphasize the competencies coming from the hybrid ?eld of
knowledge created at the intersection of accounting and fraud examination
and tend to promote the interests of the AICPA and the ACFE.
29
The ACFE publishes similar estimates every two years in its Report to
the nation(s). The participants to the 2002 and 2004 reports estimated that
the typical organization loses 6% of its annual revenue to fraud, a number
that reached 7% in 2008 but was lowered to 5% in 2006, 2010 and 2012. We
are grateful to an anonymous reviewer for signalling this point to us.
30
For instance, some cases depict fraudsters in ways that inspire
trustworthiness, being devoted to their job and family (McKnight et al.,
2008), or being married and generous (Michelman et al., 2011).
186 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
toy manufacturer (Clayton & Ellison, 2011), and a university
health center (Peterson & Gibson, 2003) – even organiza-
tions working for the public good are at risk of having their
resources misappropriated.
This professional rhetoric must nevertheless overcome a
contradiction: fraudis presentedas being linkedto the char-
acter of the perpetrators, but at the same time it is said to be
very widespread. This contradiction is resolved through the
notionof ‘‘risk’’: althoughhonest people present a lower risk
than dishonest ones, the risk is never zero, so control must
be systematic (Power, 2013). Even honest people can turn
into pathological fraudsters. As Peterson and Gibson
(2003, p. 70) explain, for example, once an individual has
started to steal without getting caught, ‘‘the temptation to
continue [is] too great.’’ Grossman (2003, p. 42) also states
that ‘‘Roughly 95 percent of the population is capable of
embezzlement under certain circumstances.’’ This type of
assertion promotes a climate of suspicion in which people
approach social relationships from the viewpoint that oth-
ers should not be presumed to be trustworthy:
Internal auditors, however, should assume that anyone
is capable of justifying the commission of fraud. Inter-
nal auditors should exercise ‘‘professional skepticism’’
particularly since fraud is typically committed by
‘‘those we trust.’’ (Hillison et al., 1999, p. 354)
Financial institutions should perform background
checks on every employee hired or promoted into sen-
sitive positions within the ?nancial institution. Such
checks should cover an individual’s criminal history,
education, previous employment and credit history.
(Durbin, 2006, p. 45)
Durbin (2006, p. 46) concludes her article with the fol-
lowing injunction: ‘‘Trust but verify.’’ This ambiguous pre-
scription is commonly made in the literature, which speaks
of trusting others while urging authorities to multiply their
veri?cation and control systems, therefore demonstrating
a lack of trust or even an exhortation to distrust. Cressey
criticized this contradictory injunction back in 1973 (when
his book was being republished), when he speci?cally ad-
dressed accountants and auditors, saying that replacing
trust with veri?cation was not a viable path (see above).
In several cases, the climate of widespread suspicion is
promoted by amplifying the gravity of the violations com-
mitted. Under the same conceptualization, the authors
lump together different behaviors that have very different
consequences. In studying the impact of deviancy on orga-
nizational performance, Dunlop and Lee (2004) considered
behaviors such as deliberately working slower than possi-
ble, arriving late for work (without permission) and mak-
ing fun of someone at work (p. 72). Without questioning
the unpleasant effects of these behaviors on immediate
colleagues, nor that working slower than stipulated in
the procedures can diminish the performance of a fast-food
outlet, one may wonder what the authors sought to estab-
lish by comparing these behaviors to larceny or sabotage.
In the same vein, Kidder (2005) studied employee miscon-
duct, lumping together longer work breaks and homicide
(pp. 389–390). Other authors postulate that deceptive
behavior in one situation is an indicator of the fraudster’s
moral strength in general: ‘‘an executive who cheats in golf
will cheat in business’’ (Wolfe & Hermanson, 2004, p. 42);
students who cheat will tend to commit fraud in their ca-
reer (Choo & Tan, 2008). Further, by failing to report a stu-
dent who does not contribute enough to group
assignments, one runs the risk of making a fraudster out
of him/her (McKnight et al., 2008).
31
These associations, all grounded in the same theoretical
template – the fraud triangle – tend to build equivalences
between serious frauds (therefore making it harder to chal-
lenge the legitimacy of the ?ght against fraud) and more
trivial cases (therefore generating the feeling that fraud is
widespread). One consequence of this is to favor an idea
of suspicion towards one another. We do not argue that
this climate of suspicion is an empirically valid description
of organizational life or that all studies of frauds explicitly
promote suspicion. The ‘‘climate of suspicion’’ emerged, in
the course of our analysis, from a stream of literature that
tends to con?ate all kinds of fraud with most serious of-
fenses and encourages organizations to take signi?cant ac-
tion in order to ‘‘tackle fraud.’’
Rendering organizations responsible
In addition to setting up a systematic internal control
and surveillance system, the authors of these papers put
forward various solutions (for preventing and averting
fraud risks) to be implemented within the organization;
the latter is conceived of as a chief intervention arena for
controlling fraud risk. Referring to surveys published by
the ACFE, several authors maintained that frauds are most
often detected thanks to employee ‘‘tips.’’ As a result, they
propose mechanisms, such as fraud tip hotlines to encour-
age people to report fraud (Dorminey et al., 2010; Gross-
man, 2003; Martin, 2007; Peterson & Gibson, 2003;
Peterson & Zikmund, 2004).
32
Others recommend, in addi-
tion to carrying out audits, hiring dedicated experts in fraud
protection; these authors are not averse to promoting the
ACFE in the process (e.g., AICPA, 2002; Clayton & Ellison,
2011; Grossman, 2003; Hillison et al., 1999). Several authors
believe that fraudsters are emboldened to persist in their
behavior if they receive only light punishments, so they rec-
ommend taking strong action against any cases of fraud de-
tected (Dorminey et al., 2010; Durbin, 2006; Hillison et al.,
1999; Martin, 2007; Murdock, 2008). For example, according
to Ramamoorti (2008, p. 524), ‘‘the rate and incidence of
crime varies inversely with the intensity and severity of rule
enforcement.’’
33
Grossman (2003, p. 44) advises people to
‘‘report incidents of embezzlement to the FBI, [their] local
district attorney or the police.’’
31
This last example is a case study which describes a mother who, in
addition to her job, goes back to school.
32
Belief in the whistleblower system is so strong that, although they
describe a case where the accused was considered by everyone to be above
suspicion and they provide numerous quotations from colleagues who are
incredulous that she could have committed a dishonest act, Peterson and
Gibson (2003) feel that the fraud could have been detected thanks to ‘‘tips’’
and ‘‘complaints’’ made by colleagues (p. 71).
33
However, a fair number of academics in criminology doubt the validity
of the relationship between crime rates and punishment – as demonstrated
by comparative crime statistics between the USA and Canada (Statistics
Canada, 2001), with the death penalty being only practiced in the USA.
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 187
Since these authors almost invariably associate fraud
with ethics, one of their key issues is to foster a good eth-
ical climate within the organization, for example by intro-
ducing a ‘‘code of ethics’’ (Dorminey et al., 2010; Durbin,
2006; Hillison et al., 1999; Martin, 2007), hiring only peo-
ple of integrity (Durbin, 2006; Grossman, 2003; Murdock,
2008) and increasing the number of opportunities for com-
munication and training on the organization’s ‘‘ethical val-
ues’’ (Dorminey et al., 2010; Hillison et al., 1999; Howe &
Malgwi, 2006; Martin, 2007; Murdock, 2008; Ravisankar
et al., 2011). It is, therefore, important to create an ‘‘ethical
culture’’ (Durbin, 2006), an ‘‘ethical infrastructure’’ (Mar-
tin, 2007) or a ‘‘workplace of integrity’’ (Dorminey et al.,
2010). Although these recommendations may seem reas-
suring, a few unorthodox authors criticize them:
High-sounding codes of ethics may make for good pub-
lic relations, but by themselves they are unlikely to
have any effect on the ‘‘ethical climate’’ of the govern-
ment or the business world. (Coleman, 1985, p. 241)
While Enron’s demise has been portrayed as resulting
from a few unscrupulous rogues or ‘‘bad apples’’ (the
phrase used by President Bush) acting in the absence
of formal management controls, Enron featured all of
the trappings of proper management control, including
a formal code of ethics, an elaborate performance
review and bonus regime, a Risk Assessment and Con-
trol group (RAC), a Big-5 auditor, and conventional
powers of boards and related committees. This control
infrastructure was widely lauded right up until the
demise of the company. (Free et al., 2007, p. 4)
Overall, to address the problem of fraud at the ethics le-
vel, the documents we examined make two principal rec-
ommendations. First, management shall strive to create a
sound ethical climate throughout the organization; second,
management shall set the example by committing itself, in
theory and in action, to stringent ethics principles. How-
ever, it seems to us that management’s ability to in?uence
ethical culture within the organization is not that obvious,
especially in light of the way in which the ‘‘risky’’ individ-
ual is constructed in the fraud triangle literature. To what
extent is management able to in?uence the ethical values
of pathological predators or industrial psychopaths? Yet,
apart from a few dissidents, such limitations do not tend
to be voiced when the triangle is articulated from an orga-
nization ethics perspective.
In sum, through the downstream literature we studied,
the organization is given a chief role in fraud intervention,
making it responsible, and, in turn, accountable for the
concretization of fraud risk. That is, as a result of the trian-
gle’s web of translations, fraud can be ‘‘explained’’ through
lapses in individual morality that have not been properly
reined in by the organization – in other words through
lapses in organization vigilance.
Extending the network through the risk management
literature
Our analyses thus far examined mainly downstream
rami?cations of the fraud triangle in academic or hybrid
journals. Although we brie?y examined how the fraud
triangle in?uenced certain auditing standards, we deemed
it relevant to investigate the practitioner literature more
extensively – speci?cally on the topic of risk management.
Risk management now constitutes a thriving discipline
(Arena, Arnaboldi, & Azzone, 2010), exerting signi?cant
in?uence on ways of thinking and doing in numerous areas
(Power, 2007). Clearly, risk management is one of today’s
most signi?cant sense-making referents that actors use in
the ?eld to develop understandings of action and inaction
surrounding private and public sector organizations. By
extending our analysis to the risk management literature,
we were able to better examine how the fraud triangle
and its rami?cations are viewed and thought of in the prac-
titioner community.
Overall, risk management literature conveys a picture
relatively consistent with a vision of fraud at the con?u-
ence of individual morality and organization control. Some
documents explicitly conceptualize fraud as a problem of
individual morality. For instance: ‘‘Fraud essentially in-
volves using deception to dishonestly make a personal gain
for oneself and/or create a loss for another’’ (CIMA, 2008, p.
7). However, morality and subjectivity are less in?uential
than in other streams of literature positioned within the
fraud triangle discourse. By contrast, the individualizing
trend is palpable in statements that downplay other
perspectives:
While fraud can, from a legal perspective, be perpe-
trated by a company, the steps taken to commit fraud
are always the actions of individuals. (PwC, 2009, p. 4)
References to the ACFE are found when the notion of
fraud is articulated as deceptive and dishonest acts com-
mitted by speci?c individuals or entities:
It’s worth reviewing what fraud is, why it happens and
how it manifests itself in corporations. According to the
Association of Certi?ed Fraud Examiners (ACFE), fraud
is ‘‘deception or misrepresentation that an individual
or entity makes knowing that the misrepresentation
could result in some unauthorized bene?t to the indi-
vidual or to the entity or some other party.’’ (Ernst &
Young, 2009, p. 1)
One of the key themes is that fraud risk always looms in
the background of organizational life, as indicated below
where CIMA mentions the inevitability of fraud:
Fraud is always a possibility. A healthy amount of pro-
fessional scepticism should be maintained when con-
sidering the potential for fraud. This does not mean
that every time someone seems to be working excessive
overtime, without taking leave, they are in the process
of committing a fraud, or that inaccuracies in the
accounts are there to cover up a fraud. Nevertheless,
they might. (CIMA, 2008, p. 41)
The fraud triangle therefore appears in these docu-
ments in ways that suggest that it is, to a large extent,
institutionalized within the risk management literature.
The following excerpt does not directly refer to the trian-
gle, but presents its three dimensions as a matter of fact,
as if they can be effectively used to make sense of fraud
and intervene meaningfully: ‘‘An effective fraud risk
188 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
identi?cation process includes an assessment of the incen-
tives, pressures, and opportunities to commit fraud’’ (IIA,
AICPA, & ACFE, 2008, p. 8).
34
Other documents explicitly
highlight the triangle and its dimensions. One illustration
(see Fig. 1) juxtaposes the triangle with a road sign, suggest-
ing the imperativeness of addressing fraud risk through the
triangle’s template.
Fig. 1 pictorially presumes that fraud risk results from
the in?uence of the triangle’s dimensions. Other docu-
ments rely on a rhetoric that tends to naturalize the three
dimensions, as if they accurately re?ect the essence of
fraud in the real world. For example,
In terms of opportunity, fraud is more likely in compa-
nies where there is a weak internal control system, poor
security over company property, little fear of exposure
and likelihood of detection, or unclear policies with
regard to acceptable behaviour. Research has shown
that some employees are totally honest, some are
totally dishonest, but that many are swayed by oppor-
tunity. (CIMA, 2008, p. 13)
In general, we found that the authors’ writing styles re-
?ect con?dence in discussing what fraud is and how it can
be controlled. Probabilistic claims relating to people’s atti-
tudinal morality and its potential disruptors are sustained
through the persuasiveness ensuing from ‘‘research’’
endeavors. The following excerpt establishes a signi?cant
linkage between the triangle’s dimensions and reality:
One of the most effective ways to tackle the problem of
fraud is to adopt methods that will decrease motive or
opportunity, or preferably both Rationalisation is per-
sonal to the individual and more dif?cult to combat,
although ensuring that the company has a strong ethi-
cal culture and clear values should help. (CIMA, 2008,
p. 14)
Therefore, the triangle emphasizes a number of target
points that should be privileged in matters of fraud inter-
vention, one of them being to ensure that the organiza-
tion’s culture is ethically ‘‘strong’’ and not conducive to
lapses in individual morality. Interestingly, one of the doc-
uments, in developing some criticisms of the fraud trian-
gle, points to the ?eld of behavioral research to overcome
the triangle’s limitations:
The fraud triangle provides a simple model of three fac-
tors that contribute to fraud: pressure, opportunity, and
rationalization. However, the fraud triangle does not
explain one critical phenomenon: why one person takes
actions to distort ?nancial results, while another in a
similar situation does not. Management, boards and
audit committees, and internal and external auditors
could bene?t from tools and resources that help opera-
tionalize the vast amount of behavioral research on the
factors that move an individual past the temptation or
opportunity to commit fraud. (CAQ, 2010, p. 31)
Thus, even when criticizing the fraud triangle, the ?rst
reaction is to look for behavioral lines of explanation, in
accordance with a deep-level tendency to individualize
fraud. Another key emphasis found in the documents stres-
ses the organization’s responsibility in reining in individu-
als’ deviancies. The following excerpt essentially maintains
that the organization’s responsibility to control fraud en-
sues fromsigni?cant pressures in the environment. As a re-
sult, an organization that fails to establish an appropriate
control structure will be viewed as poorly governed and
unvigilant:
Reactions to recent corporate scandals have led the
public and stakeholders to expect organizations to take
a ‘‘no fraud tolerance’’ attitude. Good governance prin-
ciples demand that an organization’s board of directors,
or equivalent oversight body, ensure overall high ethi-
cal behavior in the organization, regardless of its status
as public, private, government, or not-for-pro?t; its rel-
ative size; or its industry. The board’s role is critically
important because historically most major frauds are
perpetrated by senior management in collusion with
other employees. Vigilant handling of fraud cases
within an organization sends clear signals to the public,
stakeholders, and regulators about the board and man-
agement’s attitude toward fraud risks and about the
organization’s fraud risk tolerance. (IIA et al., 2008, p. 5)
In the same vein, PwC (2009, p. 14) maintains that
‘‘enlightened’’ organizations are actively involved in ?ght-
ing fraud; a logical implication is that organizations that
fail in this ?ght are not ‘‘enlightened’’ and may be viewed
as such, thereby threatening their legitimacy:
One hears commentators on fraud describing how a
particular solution is key to the management of fraud
risk – ‘‘risk identi?cation’’, ‘‘the tone at the top’’ or ‘‘bet-
ter use of technology’’ are just a few of the many keys
that seem to be available. In our experience the enlight-
ened organisation evaluates the options available to
reduce fraud losses within a comprehensive framework
of the kind we show below.
Fig. 1. Relating the fraud triangle to fraud risk.
34
Also, the 2012 Exposure Draft of COSO’s Internal control – Integrated
framework now explicitly includes a principle requiring companies to
consider the potential for fraud in assessing the risks they face (COSO, 2012,
p. 78). Three main ‘‘points of focus’’ (out of four) that allegedly may assist
management in this endeavor relate to the three legs of the triangle:
‘‘assesses incentive and pressures’’; ‘‘assesses opportunities’’; and ‘‘assesses
attitudes and rationalizations.’’
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 189
One key mechanism on which the ‘‘enlightened’’ orga-
nization should focus its energy is the establishment of a
proper ‘‘tone at the top’’ which, if appropriately communi-
cated through all hierarchical ranks, can translate into an
organizational culture conducive to ethical behavior. The
CAQ (2010, p. 10) provides detailed observations on the
matter, articulating a linkage between tone at the top,
organizational culture, and success in terms of fraud pre-
vention and detection:
Corporate culture in?uences all three sides of the fraud
triangle. A strong ethical culture creates an expectation
of doing the right thing and counteracts pressures to
push the envelope to meet short-term goals. Likewise,
an ethical culture typically supports well-designed
and effective controls that diminish opportunities for
fraud and increase the likelihood that fraud will be
detected quickly. A culture of honesty and integrity
can severely limit an individual’s ability to rationalize
fraudulent actions. [. . .] Of all the groups with a role
in the ?nancial reporting supply chain, management
has the most critical role, because it is responsible for
setting the tone at the top and establishing the culture
and designing the systems that drive the organization.
In the opinion of CAQ discussion participants, compa-
nies successful in building an ethical culture that deters
fraud do so through a dual approach. First, they clearly
state their ethical standards, and second, senior man-
agement visibly lives by those standards every day
and reinforces them through the entire organization
with appropriate systems and processes.
Grounding the argument in the realm of practice expe-
riences, the text does not leave any doubt; the organization
has a signi?cant degree of power over cultures that devel-
op from within. Further, this conveniently provides an an-
gle for criticism in case a fraud situation takes place within
the organization: fraud results from organizations that did
not establish a proper culture.
In summary, our analysis of the risk management liter-
ature indicates that fraud is articulated in it, especially
through the fraud triangle concept and its underlying
dimensions. These articulations are characterized with a
template that individualizes fraud while presenting a
range of mechanisms that can or should be used by the
organization to control risks ensuing from individuals’
deviancies. The individualizing trend is reinforced
throughout the process; fraud is explained by actions per-
petrated by deviant individuals and by organizations that
were neglectful in establishing a proper web of control
around fraud risk. As a result, social and historical lines
of interpretations are marginalized. From a broader angle,
the dual focus on individual morality and organizational
responsibility underlies most of the professional, educa-
tional, and applied-research literature produced around
the fraud triangle concept.
Discussion
We studied a particular metaphorical knowledge claim
that is advanced to make sense of and intervene in matters
of organizational fraud – the fraud triangle. Our analysis
focused on the chain of translations surrounding the trian-
gle, examining some of its antecedents, its initial formula-
tion in the emerging fraud examination community, and
how it extended its in?uence beyond that community
while being reinterpreted in diverse ways. Apart from a
few discordant voices, the translations we uncovered con-
verge on a vision of fraud being caused by morally deviant
individuals whose behavior needs to be reined in by the
organization.
Our ?ndings indicate that the fraud triangle constituted
an appealing knowledge base, engendering a plethora of
additional translations or imaginings to gain a better intel-
lectual and professional grip on a fundamentally elusive
and complex phenomenon. At the heart of the chain of
translations is Cressey’s work, which is represented as a
reliable and generalizable theoretical anchor. This sustains
the impression that fraud examination is built on a ?eld of
scienti?c knowledge predicated on academic research,
thereby conferring a certain authority to the discipline.
Numerous examples, backed with ‘‘concrete’’ cases and
quanti?ed data, are prominently featured to illustrate this
?eld of knowledge’s relevance and utility. Yet, the transla-
tion trajectories that followed the ‘‘importation’’ of Cres-
sey’s ?nal hypothesis in the fraud examination and
surrounding communities have reframed it according to a
speci?c conception of fraud and fraudsters. What appears
as a technical and neutral device, that is to say the fraud
triangle, actually promotes a vision of fraud anchored in
both the individual and organization, while downplaying
the social, political and cultural explanations for fraud. At
the end of the day, we are confronted with a series of rep-
resentations, which lie at the heart of the professional
work of a range of actors in the economy, that lead us to
view fraud through the lens of individual transgressions
being perpetrated while leaving the systemic and socio-
political aspects of fraud unchallenged. This analytical
point is valid whether the designated fraudster is a low-
er-ranking employee or top executive; putting the blame
on a speci?c individual whose lack of morality is ‘‘obvious’’,
ultimately prevents the system from being seriously ques-
tioned (Guénin-Paracini, Gendron, & Morales,
forthcoming).
We have shown that the vast majority of articles we
inventoried presents frauds carried out by individuals act-
ing alone. Other scholars – who most certainly do not sub-
scribe to mainstream thinking in accounting-criminology –
consider frauds to be less the result of individual deviance
than the outcome of societal pressure and historical con-
tingencies (Braithwaite, 1985; Coleman, 1985; Donegan &
Ganon, 2008; Free et al., 2007; Mitchell, Sikka, & Willmott,
1998; Poveda, 1994; Stuebs & Wilkinson, 2010). As Cole-
man (1985, pp. 15-16) explains:
The media’s tendency to personalize crime stories and
seek out an individual villain as a target of public out-
rage ignores the structural forces that lie at the roots
of the problem. In fact, many organizational crimes can-
not be attributed to any single individual, but only to
the kind of impersonal social forces that the media all
but ignore.
190 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
Coleman (1985, p. 53) considers the main factor of fraud
to be found in ‘‘the competitive spirit so central to the cap-
italist economic system.’’ He also mentions modern indus-
trial society, built on a desire for wealth and success, which
produces a combination of social inequality and mobility
that naturally fosters a desire to succeed at any cost and
is rationalized by a business culture (often reinforced by
a convergent organizational ethos) whose ‘‘business is
business’’ ethics seems to justify the means employed to
achieve the goal of commercial and ?nancial success (Cole-
man, 1985, pp. 207–210; p. 240). However, this view is lar-
gely incompatible with the individualizing and
organizationally-bounded conceptualization of the fraud
triangle. There may be one area of convergence, though,
that of ‘‘tone at the top’’ discussed as a way to establish
proper incentive and organizational climate. Free et al.
(2007) and Stuebs and Wilkinson (2010) are rare excep-
tions in the literature we studied, where commitment to
a socio-historical conceptualization of fraud is more
obvious.
The translation trajectories that we studied also relate
to a normative agenda. The fact that fraud is neither very
visible nor easily predictable arguably justi?es the involve-
ment of experts (read: certi?ed professionals). This endea-
vor is associated with the creation of a hybrid ?eld of
knowledge and intervention, built on the association be-
tween accounting and criminal investigation, which ulti-
mately targets the establishment of systems of
organizational surveillance predicated on the detection of
moral deviancy acts. While the ACFE’s role in disseminat-
ing this vision of fraud in the business community and
abroad is prominent, the role of the accounting profession
should not be neglected (Power, 2013). Although auditors
have traditionally shown reluctance in accepting responsi-
bilities over matters of fraud prevention and detection
(Humphrey, Moizer, & Turley, 1992), today the accounting
establishment (i.e., auditing standard setters, professional
bodies and the Big Four) is actively involved in promoting
and diffusing the triangular representation of fraud. In the
process, the conception of fraud that led to the crafting of
the triangle, biased as it may be, remains unquestioned.
This conception is materialized in a series of represen-
tations that not only portray frauds as individual trans-
gressions but also associate fraudulent acts with certain
categories of people. As translated in the wake of the
development of the fraud examination discipline, the fraud
triangle often draws a distinction between normal and
abnormal, moral and immoral. Yet the question of values
is not raised, as if the distinction between good and evil
were shaped by universal positions that do not need to
be questioned or spelled out. The neglect of values is typi-
cally sustained by focusing on uncontroversial, manifestly
reprehensible cases – or at least ones that the authors dis-
approve of themselves – while drawing general conclu-
sions beyond the situations described, as if these cases
constitute a persuasive base to support a more universal
point. By and large, cases that present a potential for rais-
ing complicated questions or dilemmas are avoided. As a
result of all this, the question of values is not debated:
the process of forming a judgment is considered self-
evident.
Overall, our analysis reveals two main lines of reasoning
characterizing the way in which the fraud triangle is artic-
ulated. First, fraud often consists of individual morality
lapses for which organizations are held accountable. Sec-
ond, anyone may succumb to the temptations of immoral-
ity and commit a fraudulent act. Together, these two lines
of reasoning tend to blur the distinction between ‘‘danger-
ousness’’ and ‘‘risk.’’ Fraud examination largely produces
probabilistic numbers – searching for relations between
frequencies of abnormalities and the living conditions of
certain categories of subjects – in an attempt to develop
and promote ‘‘objective risk factors.’’ At ?rst sight, this ap-
pears to be consistent with Castel (1991) who refers to a
broader social tendency in which the individual and the
‘‘dangers’’ it represents tend to escape fromview while dis-
embodied statistical constructs or ‘‘risks’’ are given promi-
nence. If this is true, then the notion of risk, as conveyed
today in society, is increasingly divorced from that of dan-
ger, the latter being understood as an internal quality
immanent to the subject (Castel, 1991). However, our anal-
ysis indicates that fraud triangle articulations are not fully
consistent with Castel’s (1991) theorizing. Reintroducing
the notion of dangerousness as an immanent quality of
certain categories of individuals, yet associating it with a
claimed knowledge base predicated on ‘‘objective’’ risk fac-
tors, the fraud triangle literature promotes a climate of
suspicion in the business community both towards indi-
viduals in general and towards individuals ?tting some risk
pro?le in particular. The interesting point is not so much
whether this conception is empirically valid or not, but
its performative effect which is, ?rst, to propagate a way
of conceptualizing dysfunctions in the economic system
from a moralizing angle, second, to establish the need for
organizations to manage ethical risk and, third, to legiti-
mize the relevance of fraud examination expertise.
A key pattern in the literature we analyzed is deviance
not being related to complex social factors, but to failures
in individual morality and breakdowns in the organiza-
tion’s endeavors to control probity. As such, the fraud tri-
angle literature fosters a climate of suspicion against
individuals (employees, managers, board members) that
engenders a need for constant vigilance. It rests on the be-
lief that it is possible to detect wrongdoing, fraud, dishon-
esty and unethical behavior and to remedy (at least
partially) these acts of moral deviancy by implementing
an array of control mechanisms within the organization.
Further, deviance can occur anywhere; everyone must be
vigilant, watch out for their possessions and keep others
under surveillance. The goal is not to eradicate fraud
(which is viewed as an impossibility), but to implement a
range of organizational mechanisms and policies aimed
at restoring order, morality and security. Further, while
the mainstream discourse promoted through the fraud tri-
angle emphasizes an ‘‘obvious’’ need to identify and neu-
tralize fraud perpetrators, their rehabilitation is not
encouraged given that moral deviancies may be incurable.
At the end of the day, the vision that underlies both fraud
triangle technology and professional claims of fraud spe-
cialists implies a perpetual cat and mouse game, where
deeply-rooted socio-historical causes of fraud are relegated
to the background of the players’ re?ective gaze. Yet, this
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 191
vision is not neutral. The fraud triangle rede?nes social,
political and economic relations through a normalizing dis-
course that celebrates the use of organizational surveil-
lance to control risk ensuing from individuals’ frail
morality. In so doing, individuals and their subjectivity
are constructed as vectors of riskiness that must be tightly
controlled by the organization.
Conclusion
Our broad purpose has been to explore how an appar-
ently descriptive but profoundly normative discourse on
organizational fraud has emerged around the ‘‘fraud trian-
gle’’ concept. Speci?cally, we followed the fraud triangle
genealogy and analyzed its underlying chains of transla-
tions and problematizations. Our analysis indicates that
fraud triangle articulations privilege individualistic expla-
nations of fraud to the detriment of sociological explana-
tions that highlight fraud’s sociopolitical nature and
locates its causes in institutional and historical arrange-
ments. Instead, the fraud triangle focuses attention on
the fragility of individual morality and establishes the
organization’s duties in controlling ‘‘risky individuals.’’
One of our main arguments is that the fraud triangle
constitutes a rhetorical tool that professional associations
have used to create and consolidate a ?eld of knowledge
and intervention around individual morality. Our analysis
brings to the fore translations representing the fraud trian-
gle as a credible technology that allows fraud specialists to
speak authoritatively and intervene, in certain ways, in
organizational fraud. In so doing, a certain discourse of
normality gains legitimacy through the recruitment of al-
lies around and fabrication of a concept that appears to
be technical and descriptive, but contains a very speci?c vi-
sion of fraud.
The feeling of neutrality is sustained by a series of illus-
trations focused on the least controversial examples. This
also serves to present fraud as ‘‘inherently’’ unacceptable.
Lumping these ‘‘serious acts’’ (e.g., bribery, misappropria-
tion of funds) with trivial deviances (e.g., arriving late at
work, taking long breaks) and more controversial actions
(e.g., working more slowly than asked by the hierarchy,
workplace resistance) then serves to justify considering
any ‘‘workplace deviant behavior’’ as a fraud that should
be systematically condemned, deterred and punished.
Fraud is constituted, therefore, as reprehensible and im-
moral, though relatively controllable when organizations
establish appropriate surveillance systems. The notion that
morality boundaries vary in time and space (Douglas,
1966) is ignored.
These ?ndings contribute to our understanding of the
links between fraud, organizational control and society.
Previous studies argued that today’s society is character-
ized by a proliferation of control and audit technologies
to restore trust – but that basically promote distrust
(Power, 1997). Our study can be viewed as an examination
of the problem of trustworthiness. We showed that a cli-
mate of suspicion is promoted in the fraud triangle litera-
ture and that the organization is deemed a legitimate site
for restoring trust through intervention. Our analysis also
indicates that technologies of organizational control and
surveillance are in?uenced by moral judgments about
what is normal and what is unacceptable deviance. Pro-
moted in the name of reason and economic commonsense,
the fraud triangle is a technology of fraud risk manage-
ment that simultaneously targets individual character
and organizational studiousness. The triangle sustains nor-
malizing patterns that aim to shape identities of risky indi-
viduals whose frail morality needs to be tightly controlled
and disciplined by the organization. In so doing, socio-his-
torical visions of fraud are marginalized and relegated to
the periphery of the ?eld.
Acknowledgements
We bene?ted from the comments by David Cooper, Sa-
jay Samuel, James Williams, André Spicer, four reviewers,
and workshop participants at HEC Montréal. We also
acknowledge the comments from participants at the
2013 Alternative Accounts Conference (Toronto), the
2013 Annual Congress of the European Accounting Associ-
ation (Paris) and the 2013 EGOS colloquium (Montréal). Of
course, the opinions expressed in the present manuscript
bind the authors only. The ?nancial support of the Social
Sciences and Humanities Research Council of Canada is
also gratefully acknowledged.
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194 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
doc_689647768.pdf
This article examines how a vision of organizational fraud has been constructed around a
particular technology, the fraud triangle, which was initially developed in the aftermath of
the creation of the fraud examination discipline. We examine the genealogy of the fraud
triangle and follow various chains of translations underlying its construction. One of the
main translation trajectories we uncover presents individuals as vectors of moral riskiness
needing to be vigilantly monitored and controlled by the organization. The organization is
conceived of as a prime site in which fraud is to be addressed – not annihilated but significantly
reduced as long as sufficient care is devoted to establishing layers of vigilance. As
such, the fraud triangle redefines social, political and economic relations through a web
of translations that both celebrate and normalize the use of organizational surveillance systems
to control risk ensuing from the individual’s (alleged) frail morality.
The construction of the risky individual and vigilant
organization: A genealogy of the fraud triangle
Jérémy Morales
a,?
, Yves Gendron
b
, Henri Guénin-Paracini
b
a
ESCP Europe, CPO Department, 79 avenue de la République, 75543 Cedex 11 Paris, France
b
Faculté des sciences de l’administration, Pavillon Palasis-Prince, 2325, rue de la Terrasse, Université Laval, Québec City, Québec G1V 0A6, Canada
a b s t r a c t
This article examines how a vision of organizational fraud has been constructed around a
particular technology, the fraud triangle, which was initially developed in the aftermath of
the creation of the fraud examination discipline. We examine the genealogy of the fraud
triangle and follow various chains of translations underlying its construction. One of the
main translation trajectories we uncover presents individuals as vectors of moral riskiness
needing to be vigilantly monitored and controlled by the organization. The organization is
conceived of as a prime site in which fraud is to be addressed – not annihilated but signif-
icantly reduced as long as suf?cient care is devoted to establishing layers of vigilance. As
such, the fraud triangle rede?nes social, political and economic relations through a web
of translations that both celebrate and normalize the use of organizational surveillance sys-
tems to control risk ensuing from the individual’s (alleged) frail morality. In the process,
other visions of fraud, focused on the broader role of society, political agendas and power-
ful economic institutions in engendering and preventing fraud, escape from view.
Ó 2014 Elsevier Ltd. All rights reserved.
Introduction
Many people could, given the right set of circumstances,
be capable of fraud. Experts in this area talk about the
‘‘fraud triangle,’’ whose three legs are: the opportunity
to act dishonestly, an incentive or pressure to do so,
and rationalization by the fraudster of their actions. In
other words, you need an offender motivated either
by ?nancial gain, pressure to performor a threat to their
power, money or status; you need susceptible victims;
and you need an absence of controls to prevent or halt
the scam. (The Observer, December 21, 2008)
CFOs can’t be expected to peer into the souls of every
employee or business partner, of course, but they do
need to be more cognizant than ever of the three sides
of the classic ‘‘fraud triangle’’: pressure, opportunity,
and the capacity to rationalize. When those elements
unite, fraud often erupts. (CFO Magazine, April 1, 2009)
These two quotations attest to the use in both the main-
stream and specialized press of a particular expression,
‘‘the fraud triangle,’’ in reference to the activity of explain-
ing, detecting or preventing fraud. They also illustrate key
assumptions often present in discourses surrounding the
fraud triangle: an individual activity and clearly worthy
of condemnation, fraud is motivated by the desire for per-
sonal gain, either in wealth or power. To prevent it, organi-
zations need to keep a closer eye on the ‘‘soul’’ of their
members and, given that fraud ensues from lack of control,
it follows that the best way to keep it from spreading is to
foster control and cultivate speci?c skills in its detection. In
this article, we examine how the notion of organizational
fraud has been conceptualized through a particular tech-
nology: the fraud triangle.http://dx.doi.org/10.1016/j.aos.2014.01.006
0361-3682/Ó 2014 Elsevier Ltd. All rights reserved.
?
Corresponding author. Tel.: +33 149232029.
E-mail addresses: [email protected] (J. Morales), yves.gendron
@fsa.ulaval.ca (Y. Gendron), [email protected]
(H. Guénin-Paracini).
Accounting, Organizations and Society 39 (2014) 170–194
Contents lists available at ScienceDirect
Accounting, Organizations and Society
j our nal homepage: www. el sevi er. com/ l ocat e/ aos
Broadly speaking, our research connects to the power of
systems of thought in shaping people’s interpretive
schemes along a particular angle, in in?uencing social de-
bates, and in delineating the boundaries of professional
jurisdictions. As illustrated in the quotations above, the
fraud triangle promotes a vision where certain events
and types of behavior are referred to and shaped as fraud-
ulent and abnormal. The triangle also aids in the construc-
tion and legitimation of a ?eld of intervention around
organizational deviance problems. We aim to understand
how the fraud triangle has been articulated through spe-
ci?c conceptualizing angles.
For several decades, both academic and professional
literature has taken great interest in the notion of fraud
or, more generally, the ‘‘dark side’’ of organizations
(Vaughan, 1999). Many scholars and practitioners have
sought to better understand the causes of organizational
deviance and assess different methods for detecting and
preventing it. Keen interest in the matter gave rise to
the emergence and propagation of a ?eld of knowledge
spawned by the meeting of two disciplines that had been
relatively distinct previously: accounting and criminol-
ogy. We will show that the foundation of this hybrid
?eld of knowledge, ‘‘fraud examination,’’ was built lar-
gely on a particular image, that of the ‘‘fraud triangle.’’
Tracing the genealogy of the fraud triangle, therefore,
leads us to examine the creation of the ?eld of fraud
examination.
Importantly, our primary interest is not in how the
fraud triangle is technically used to detect fraud, but in
how its conceptualization and the underlying constitution
of a ?eld of knowledge have been structured around spe-
ci?c angles. Following translations made in the academic
and professional literature, this study highlights that a spe-
ci?c vision of fraud characterizes how the triangle has been
conceptualized and conveyed through formal discourse.
Thus, we contribute to an emerging ?eld of inquiry on hy-
brid processes of knowing, spanning across the boundaries
of organizations, professions and groups of experts (Miller,
Karunmäki, & O’Leary, 2008), showing not only how ideas
move across disciplines, but also how a corpus that aspires
to be both new and distinct from existing bodies of knowl-
edge may take root.
In our genealogy, we will trace the different transla-
tions, developments and claims that have surrounded the
spread of the triangle and possibly impacted the construc-
tion of a new area of competence and its legitimization
around the notion of fraud. Our empirical task, therefore,
is to follow and reconstruct the chain of translations (La-
tour, 1987) surrounding the fraud triangle. Every transla-
tion entails a certain modi?cation of the original concept
(Gendron & Baker, 2005). Further, the term ‘‘translation’’
comprises the unexpected twists and deformations that
may occur in the spread of ideas. While of?cial histories
of ?elds of knowledge often ignore these elements of
unpredictability (Kuhn, 1970), they are nevertheless com-
monplace. Translation also implies continuous work in
extending the web of meanings surrounding a given con-
cept. Thus, in our case, the fraud triangle does not have a
single, ?xed meaning; it is subject to continuous reinter-
pretation. Even the ‘‘core’’ elements of the triangle changed
signi?cantly when they were imported into the nascent
fraud examination discipline.
The translations we follow point to a distinctive way of
understanding the subject studied by organizational devi-
ance professionals – a subject that is no longer limited to
the behavior of individuals in and around an organization,
but that nowalso extends to their character. Hence in addi-
tion to the notion of translation developed by Latour
(1987), we will make use of some of Foucault’s writings
on the normalization and constitution of the subject (Fou-
cault, 1994, 2001, 2004), and in particular, his analysis of
the intersection between psychiatry and criminology (Fou-
cault, 1981). The spread of the fraud triangle has translated
into the development of a discourse promoting the evalu-
ation, monitoring and normalization of the character of
organizational members. This is because, together with
organizational control mechanisms, individuals’ morality
is presented as key to understand fraud risk factors. Be-
yond usual auditing devices focused on conformity con-
trols, the fraud triangle thus introduces morality and
immorality as a target for fraud ?ghting.
Before going further, we want to stress that our geneal-
ogy is not aimed primarily at evaluating how the fraud tri-
angle and its different articulations resonate with
surrounding and broader discourses (e.g., Miller & O’Leary,
1987), but rather to follow chains of translations and
examine the fraud conceptualizations they sustain. Also,
while we distinguish translations along three main periods
(roughly de?ned – i.e., moving upstream; translations real-
ized within the fraud examination community; moving
downstream), in our analysis we do not seek to highlight
speci?c variations within each of them. Our interest is to
unveil what we view as the most important translations
during each phase.
A key goal of our study is to trace the normative
assumptions that underlie the association between fraud
and morality. We will show that they form the basis of a
discourse, not only about fraud detection and deterrence,
but also about normality and deviance within organiza-
tions. De?ning an act as a transgression or fraud is ambig-
uous (Berger, 2011). This is because fraud de?nitions relate
to sociopolitical processes of labeling and are matters of
disagreement and con?ict in society (Becker, 1963). Yet,
the triangle is presented as a technical device that aims
to prevent acts deemed to be naturally unacceptable. This
enterprise is clearly normative: through an ostensibly neu-
tral technicality a speci?c point of view on organizational
deviance is promoted. However, this is a normalizing view-
point that conceives of fraud as a public issue caused by
individuals’ frail morality needing to be addressed by the
organization. In other words, the conceptualizations and
re?nements of the fraud triangle are based on implicit sep-
arations between normality and abnormality, yet the
boundaries between normal and abnormal are not dis-
cussed – as if the latter were natural and universally
accepted.
We thus show how the fraud triangle traces links be-
tween accounting, auditing and risk management on the
one hand, and assumptions about normality and organiza-
tional deviance on the other. In particular, our analysis
points to the fraud triangle extending the ?eld of organiza-
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 171
tional surveillance beyond individuals’ behavior to include
the assessment of risks stemming from individual subjec-
tivity. Thus, the fraud triangle re?ects and participates in
the construction of one of the main social forces of our
modern age: the rede?nition of social, political and eco-
nomic relations around systems that position the subject
as a vector of riskiness and danger (Foucault, 1981) and
set up and generalize surveillance and the assessment of
risks stemming from individual subjectivity (Foucault,
2004).
Also, our analysis of the triangle’s main translation tra-
jectories points to a climate of suspicion promoting a ?eld
of practical intervention within the organization, which is
made responsible for establishing vigilant systems of con-
trol aimed at preventing and detecting lapses in organiza-
tional members’ morality. Therefore, we study
conceptualizations of organizational deviance, as epito-
mized in the discourse of the fraud triangle, to show how
they relate to normalizing stances encouraging organiza-
tions to take responsibility for controlling individual char-
acter. Other visions of fraud, focused on the broader role of
society, political agendas and powerful economic institu-
tions in engendering and preventing fraud, are systemati-
cally downplayed and overlooked. In the process, the
organization is constructed as a prime site in which fraud
can be reined in – not annihilated but signi?cantly reduced
as long as suf?cient care is devoted to establishing a bat-
tery of vigilant controls. Conditions are then arguably in
place for social order, and the dominant interests it sus-
tains, to reproduce.
In the following section we present our research meth-
ods. Next, we move upstream in the chains of translations
that have led to the construction of the fraud triangle. Fol-
lowing that, we present the main architects of the triangle
and describe the translations they made as well as the
strategies they followed to present the triangle as a legiti-
mate way of thinking and intervening in organizational
deviance. Then, we move downstream in the chains of
translations to follow some of the successive shifts that oc-
curred as the network of support around the fraud triangle
was being extended. In particular, we show that these
downstream chains promote a climate of suspicion that
enrolls the organization as a key site of fraud control. In
the discussion section, we emphasize one of the main
interpretive statements ensuing from our analysis, namely,
that organizational fraud is conceived of as a dual failure,
one in individual morality and the other in the organiza-
tion’s endeavors to control for individual probity. Lastly,
the conclusion articulates some of the main implications
resulting from our work.
Research methods
Our genealogy of the fraud triangle is carried out
through documentary study. Our study is especially predi-
cated on a pivotal practitioner book, which articulates con-
nections between the nascent ?eld of fraud examination
and the discipline of criminology: Occupational Fraud and
Abuse, by Joseph Wells (1997). In addition to republishing
this book three times under the title Corporate Fraud
Handbook: Prevention and Detection, Wells founded the
Association of Certi?ed Fraud Examiners (ACFE). The book
is part of the ACFE’s examination preparation toolkit. It
helped guide our documentary research upstream from
the triangle and shed light on some of its origins. We also
looked into the ways in which the fraud triangle and some
of its translations are articulated in ACFE literature. Down-
stream, we studied how the triangle and some of its deriv-
atives are discussed in a range of journalistic, academic and
professional documents. All told, our documentary analysis
covers a broad range of successive translations, from the
emergence of white-collar criminology to recent shifts
and re?nements in the notion of the fraud triangle. Our
analysis is articulated into three distinct parts – which
can be viewed as three ‘‘moments’’ of translations.
Our analytical journey begins with the examination of a
strand of criminological research devoted to white-collar
crime, which Wells (1997) presents as one of the concep-
tual bases of fraud examination knowledge. Although we
recognize that the initiators of the white-collar crime
movement built their ideas on previous knowledge and
networks (Latour, 1987), the chains of translations could
have been retraced ad in?nitum and we had to choose a
reasonable starting point. In particular, we discuss several
debates among criminologists that we link to competing
visions of fraud.
Yet these debates were largely overshadowed when the
fraud triangle was conceptualized in the nascent ?eld of
fraud examination – the criminological foundations of
fraud examination being presented as an indisputable
and generalizable knowledge area. We are particularly
interested in examining how the ACFE built a body of
knowledge around ‘‘fraud examination,’’ and what sort of
vision of fraud it conveys. In addition to Wells’ (1997)
book, we analyze a number of documents connected to
the ACFE, including Albrecht and Albrecht’s (2004) book
entitled Fraud Examination & Prevention, whose ?rst author
was ACFE’s ?rst president.
In order to investigate, downstream and in greater
depth, the ‘‘spinning off’’ of the fraud triangle beyond the
ACFE, we made an inventory of publications on the subject
using bibliometric tools. We searched for the term ‘‘fraud
triangle’’ without any journal speci?cation in the following
databases: Business Source Complete, ScienceDirect, Emer-
ald and Jstor. Through this process we identi?ed 99 arti-
cles. Of these, we considered 54 relevant for our study.
1
By retracing bibliographies, we obtained ten additional arti-
cles that mention the three dimensions of the triangle with-
out speci?cally using the term ‘‘fraud triangle’’ or used the
term but were not referenced in our selected databases.
We should note that these articles were published primarily
in academic journals, but also in a number of professional
and hybrid journals. We read and analyzed all 64 articles.
For each document, we listed (when relevant) the theoreti-
cal framework(s) used, the de?nition of fraud (and related
1
We eliminated articles that only mentioned the term ‘‘fraud triangle’’
without really presenting the model and without indicating its dimensions.
We also eliminated articles which were only returned by the database
because they cited another article whose title includes the term ‘‘fraud
triangle.’’
172 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
references), the causes of fraud, the solutions to fraud, the
methodology, the way the triangle is used (presence of all
the dimensions, dimensions changed or added, translation
of each dimension), the speci?c ?eld(s) of application men-
tioned (e.g., employee fraud, misstatement, corruption, etc.),
and the main argument. Four main translation trajectories
emerged as signi?cant: focus on internal control, emphasis
on morality, assertion of suspicion, and promotion of organi-
zational surveillance. We followed these four themes down-
stream chains of translation. Further, as auditing standards
were often quoted in these articles to provide de?nitions
of fraud, we analyzed the translations comprised in SAS 99
and ISA 240. Although these standards do not mobilize the
expression ‘‘fraud triangle,’’ both reproduce the three
dimensions mentioned by Wells as constituting the triangle.
Finally, we examined several key documents in the risk
management, professionally-based literature. We limited
our analysis to documents issued by major accounting
organizations, such as the American Institute of Certi?ed
Public Accountants (AICPA), the Chartered Institute of
Management Accountants (CIMA), the Center for Audit
Quality (CAQ) and the Big Four. Accountants have been
particularly involved in promoting their expertise in risk
management, appropriating and rede?ning the concept of
risk and its management along a variety of angles (Spira
& Page, 2003). We identi?ed the documents we analyzed,
which are referenced below, either by questioning the
Internet (using sentences such as ‘‘managing fraud risk’’)
or examining the organization’s website.
Moving upstream in the chain of translations: The
articulation of an individualizing vision of fraud
A signi?cant component in the development of a net-
work of support surrounding the fraud triangle is the foun-
dation of a new ?eld of knowledge and intervention; that
of fraud examination as defended and promoted by the
ACFE. Through our genealogical work, we ?rst analyze
how criminology was initially translated into fraud exam-
ination. In this respect, Wells (1997) begins his book by
presenting fraud specialization as grounded in criminolog-
ical knowledge. He brings together the writings of Edwin
Sutherland (pp. 8–10) and Donald Cressey (pp. 10–22) to
tie the ?eld of fraud examination to previous academic
studies in criminology. Presenting the ‘‘fraud triangle’’
(Wells, 1997, p. 11) – comprising pressure, opportunity
and rationalization – as having stemmed from ‘‘Cressey’s
?nal hypothesis’’ gives it rhetorical strength. However, as
shown below, Wells makes signi?cant translations when
articulating this relationship and promotes a speci?c vision
of fraud that differs from the one advocated by these two
scholars. Generally speaking, we aim to show that the
importation of criminology into the nascent fraud exami-
nation discipline is characterized by a signi?cant transla-
tion bias that dismissed or downplayed segments of
criminological knowledge that viewed crime from socio-
logical or systemic angles.
In the book which made him famous, Sutherland (1937)
endeavors to show that the causes of criminality should
not be sought in the psychological traits of the individual,
but rather in processes of socialization and cultural trans-
mission that allowed certain individuals to learn criminal
techniques and, at the same time, led them to align their
worldview with that of their ‘‘profession’’ – internalizing
its customs, codes and practices.
2
In 1939, he was ap-
pointed president of the American Sociological Association
and during his ?rst presidential address he coined the
term ‘‘white collar crime,’’ de?ned as the violation of
delegated trust within an organization (Sutherland, 1940).
A few years later, he put forward a systematic analysis of
it, stating that:
These violations of law by persons in the upper socio-
economic class are, for convenience, called ‘‘white collar
crimes.’’ This concept is not intended to be de?nitive,
but merely to call attention to crimes which are not
ordinarily included within the scope of criminology.
White collar crime may be de?ned approximately as a
crime committed by a person of respectability and high
social status in the course of his occupation. (Suther-
land, 1983, p. 7)
Sutherland (1983) showed that criminology greatly
underestimated (or even obscured) the violations of law
perpetrated by persons of the upper socioeconomic class.
3
His hypothesis, now commonly referred to as ‘‘differential
association theory,’’ highlighted socialization and learning
processes – not pathological psychological traits – as central
explanations of criminal behavior. In adopting this stance,
‘‘Sutherland discredited widely-held theories of his day that
attributed criminal behavior to poverty and its associated
pathologies’’ (Shapiro, 1990, p. 346), what Braithwaite
(1985, p. 2) calls the ‘‘traditional theories of crime which
blamed poverty, broken homes, and disturbed personali-
ties.’’ The various cases (especially the biographical ones)
presented by Sutherland are enlightening in this regard
and show how the people concerned gradually lose their
attachment to a certain de?nition of honesty as they dis-
cover that their professional success depends to a large ex-
tent on performing unethical or even illegal acts. Given the
interpersonal competition that exists in the workplace,
refusing to compromise their initial values may prevent
individuals from being as effective in their occupation as
their less scrupulous colleagues. The individual then learns,
along with techniques speci?c to the job, to adopt certain
‘‘rationalizations’’ which justify behavior that is nevertheless
illicit (Sutherland, 1983, p. 245).
2
Based on the memoir of a former thief, the author develops the idea
that theft is not a set of isolated acts but a social institution, and that
professional thieves constitute a community. A particularly important
?nding of this book is to show how, unlike amateurs, professional thieves
manage to avoid legal sanctions thanks to the intervention of a ‘‘?xer’’ (see
Sutherland, 1937, pp. 65–87).
3
This book was very controversial in the United States mainly because
the author broke a taboo by demonstrating the magnitude of the crimes
perpetrated by the country’s elites (both in large corporations and in
government) and also because he showed that many acts which are never
brought before a criminal court should nevertheless be considered crimes.
Accordingly, the strength of white-collar criminals is that they are able to
in?uence legislation and law enforcement and also that they are most often
judged by administrative commissions and civil or equity jurisdictions,
which may allow white-collar criminals to avoid the stigma associated with
criminal identity.
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 173
Sutherland (1983) counters previous studies in crimi-
nology by expanding the de?nition of fraud to include acts
that had not been sanctioned by a criminal court (and
which do not, therefore, appear in the statistics used by
most criminologists). His argument is that the de?nition
of white-collar crime should include violations of non-
criminal law (Berger, 2011, pp. 6–7). As Coleman (1985,
p. 4) points out, one of Sutherland’s objectives was to dem-
onstrate that the violations perpetrated by persons of the
upper socioeconomic class are not treated in the same
way as others because the powerful have the ability to
in?uence legislation and, most importantly, its
enforcement.
Sutherland recognizes violations of law but proposes a
broader de?nition of violation, especially relating to re-
straint of trade, rebates, infringement, misrepresentation
in advertising, and ?nancial manipulations. He also in-
cludes ‘‘unfair labor practices’’ (Sutherland, 1983, p. 14).
His de?nition of ‘‘?nancial manipulations’’ (dealt with in
chapter 10, pp. 153–173), for example, is particularly
broad:
The term ‘‘?nancial manipulation’’ is used here to refer
to practices of corporations or of their executives which
involve fraud or violation of trust. These practices
include embezzlement, extortionate salaries and
bonuses, and other misapplications of corporate funds
in the interest of executives or of the holders of certain
securities; they include public misrepresentation in the
form of stock market manipulations, fraud in sale of
securities, enormous in?ation of capital, inadequate
and misleading ?nancial reports, and other manipula-
tions. (Sutherland, 1983, p. 153)
Expanding this subject matter beyond what is statuto-
rily de?ned as crime by existing criminal law did not go
without controversies. This is because de?ning an act as
deviant, criminal, transgressive or fraudulent is intrinsi-
cally ambiguous (Becker, 1963, 2011). Indeed, rules differ
from group to group and a person may break the rules of
one group by the very act of abiding by the rules of another
group. De?ning a rule (and hence what constitutes rule-
breaking), therefore, involves a sociopolitical process and
its content is a matter of disagreement and con?ict to the
point where of?cial rules may differ from what the major-
ity of people consider to be appropriate (Becker, 1963, p.
15).
This position contradicts a commonly held assumption
about rule-breaking – as obvious acts of deviancy ensuing
from the perpetrator’s deviant morality:
What laymen want to know about deviants is: why do
they do it? How can we account for their rule-breaking?
What is there about them that leads them to do forbid-
den things? Scienti?c research has tried to ?nd answers
to these questions. In doing so it has accepted the com-
mon-sense premise that there is something inherently
deviant (qualitatively distinct) about acts that break
(or seem to break) social rules. It has also accepted
the common-sense assumption that the deviant act
occurs because some characteristic of the person who
commits it makes it necessary or inevitable that he
should. Scientists do not ordinarily question the label
‘‘deviant’’ when it is applied to particular acts or people
but rather take it as given. In so doing, they accept the
values of the group making the judgment. (Becker,
1963, pp. 3-4)
According to Becker, the notions of rule-breaking and
deviance (and therefore fraud) cannot be intrinsically de-
?ned by character traits, living conditions (economic sta-
tus, lifestyle) or even by particular acts, because all of
these de?nitions would deny the political and divisive nat-
ure of rule-making: ‘‘deviance is not a quality of the act the
person commits, but rather a consequence of the applica-
tion by others of rules and sanctions to an ‘offender’’’
(Becker, 1963, p. 9). What is considered as fraud depends,
therefore, on the values and position of the person speak-
ing and it is important to examine his/her assumptions
to better understand what motivates him/her to express
a certain moral view.
Overall, it can be argued that disagreement over the
nature (individual or collective) and cause (moral or socio-
logical) of white-collar crime characterizes the ?eld of
criminology (Benson & Simpson, 2009; Berger, 2011; Cole-
man, 1985; Colvin et al., 2002; Poveda, 1994). Accordingly,
Berger (2011, p. 27) suggests distinguishing between
macro-sociological, micro-sociological, and individualistic
explanations of white-collar crime. Macro-sociological the-
ories ‘‘focus on the broader historical, economic, and polit-
ical factors that impact organizations’’, while micro-
sociological theories ‘‘focus on the link between individual
actors and their immediate organizational circumstances.’’
For their part, individualistic theories ‘‘focus on the causes
of crime that are located within the individual rather than
the social environment.’’ According to this classi?cation,
Sutherland provides micro-sociological explanations of
white-collar crime (Berger, 2011, pp. 35–36), whereas
Cressey focuses on individualistic explanations (p. 30).
Macro-sociological theory does not appear to have had
any in?uence on the crafting of the fraud triangle (for
examples of macro-sociological theories, see Coleman,
1985; Poveda, 1994).
Cressey’s individualistic theory occupies a prominent
place in of?cial representations of how fraud examination
knowledge was founded. Although one does not necessar-
ily expect practitioners to adopt a position in an academic
debate, the creation of a formal body of practitioner knowl-
edge may be founded on a particular representation of
reality and, therefore, favor one orientation to the detri-
ment of others. Certain representational choices have thus
been made (explicitly or implicitly) in establishing the
knowledge base that underpins the fraud examiners’ juris-
dictional claim. However, the of?cial story presents these
choices as obvious and uncontroversial, as if they naturally
ensue from some inherent properties of fraudulent acts
and fraudsters, and a long tradition of ‘‘scienti?c’’ research
in criminology. In other words, the foundation of a jurisdic-
tional claim based on a view of fraud inspired by Cressey’s
research involves a number of assumptions.
Cressey, a doctoral student of Sutherland, studied the
psychology of the violation of ?nancial trust using a series
of interviews conducted with prison inmates, who had
174 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
been convicted of embezzlement (Cressey, 1953). His
methods for selecting people to interview reveal his re-
search focus: choosing from inmates at three US prisons,
incarcerated after being convicted of certain crimes; he se-
lected those he considered to have initially accepted, in
good faith, the position of trust that was used to perpetrate
the crime (Cressey, 1953, p. 20).
4
In focusing on prison in-
mates, Cressey eschewed the study of an entire range of
white-collar crimes considered to be the most relevant by
Sutherland, whose argument is that the strength of white-
collar perpetrators lies in their ability to avoid criminal con-
victions better than anyone else. In particular, Cressey ig-
nored acts of tax evasion and collective fraud. Moreover,
by choosing only people who, upon examination of their ?le
or after interviewing them, seem to have initially accepted
the job ‘‘in good faith,’’ he favored the emergence of a dis-
course where the people he met did not consider themselves
to be professional thieves (see Sutherland, 1937). The advan-
tage of this method is that it results in a relatively homoge-
neous set of cases, ruling out the possibility of variation by
selecting cases he felt were the result of the same type of
behavior and developed in a similar way.
Cressey assumed that embezzlement is an act commit-
ted for individual and ?nancial motives. This position ap-
pears quite clearly in his interpretation of the acts of
misappropriation committed by employees against their
employers (Cressey, 1953, pp. 57–66). Amongthe numerous
cases presented, only one is not motivated by ?nancial con-
cerns – that of anemployee who committedanact of misap-
propriation, not because of personal dif?culties, but because
he resented his status in the organization: he felt that he
was underpaid, overworked and treated unfairly. Yet Cres-
sey persisted in considering this behavior to be motivated
by an individual problem, which ignores any broader expla-
nation, even though the individual interviewed points to a
set of social and collective motives linked to relations of
authority that he considered unequal and unfair.
When considering the spectrum of perspectives in the
?eld of academic criminology, Cressey’s thinking appears
to be rather restricted.
5
He does not examine every type
of white-collar crime, but only embezzlement perpetrated
by an individual acting alone, motivated by personal gain,
and for which he has betrayed a position of trust that he
had initially accepted in good faith.
6
Examining his work
in greater detail, at the core of Cressey’s thesis, we ?nd a
combination of three elements that arguably help to explain
the process by which an individual comes to commit an act
of embezzlement:
Trusted persons become trust violators when they con-
ceive of themselves as having a ?nancial problem which
is non-shareable, are aware that this problem can be
secretly resolved by violation of the position of ?nancial
trust [perceived opportunity], and are able to apply to
their own conduct in that situation verbalizations
which enable them to adjust their conceptions of them-
selves as trusted persons with their conceptions of
themselves as users of the entrusted funds or property
[rationalization]. (Cressey, 1953, p. 30)
Of these three conditions, the most evident (to the point
where it may seem tautological) is that of perceived oppor-
tunity: if a person commits an act, then he or she must nec-
essarily have perceived the possibility to do so. Besides,
Cressey (1953) gives ‘‘opportunity’’ less importance; the
relevant chapter is particularly short (15 pages versus 44
for the chapter describing what constitutes a non-share-
able problem and 46 for the one de?ning rationalization).
In this short chapter, he seeks above all to demonstrate
that one should not consider ‘‘opportunity’’ as such but
‘‘perceived opportunity,’’ meaning that organizational con-
trols are less important than individuals’ perceptions. Cres-
sey provides additional details on opportunity in the
preface to the 1973 edition:
The general argument ordinarily is that embezzlement
can be eliminated by tighter accounting controls. My
response was, and is, that modern business necessarily
requires conditions of trust and that, therefore,
accounting controls rigid enough to eliminate embez-
zlement (which, by de?nition, involves conversion of
money or goods with which the actor is entrusted) will
also eliminate business. [. . .] Accountants and other
businessmen continue to write as if the opportunity
for trust violation can and should be eliminated. [. . .]
What is needed is a prevention program clearly based
on the fact that objective opportunities for embezzle-
ment are necessarily present in modern business orga-
nizations. (Cressey, 1973, pp. xii-xiii)
Therefore, Cressey is skeptical about internal controls’
ability to eliminate opportunity, and argues that one
should assume that ‘‘objective opportunities’’ always exist.
In the chapter on opportunity, he does address the issue of
how to reduce opportunity but primarily seeks to under-
stand why people eventually come to perceive their situa-
tion as an opportunity to engage in embezzlement. Thus,
Cressey focuses less on the link between individuals and
organizational circumstances than on phenomena located
‘‘within’’ individuals.
Of the three elements Cressey describes, the one that
has received the most criticism is the non-shareable ?nan-
cial problem (Coleman, 1985). The author’s idea is that,
even when someone has had the possibility to embezzle
for several years, he will only do so because he is facing a
problem that he thinks he cannot ‘‘share’’ with anyone
and hence does not seek for others’ help. Again, however,
4
He obtained the list of people convicted for: embezzlement, larceny by
bailee, con?dence game, forgery, uttering ?ctitious checks, conspiracy,
grand theft, theft of government property, falsi?cation of a bill of lading
used in interstate shipment and theft of goods in interstate shipment
(Cressey, 1953, p. 23).
5
For instance, beyond Sutherland’s ‘‘differential association theory’’,
Merton crafted a ‘‘strain theory’’ (based on Durkheim’s concept of anomy),
Cohen (1955) articulates a ‘‘theory of subcultures’’, Sykes and Matza (1957)
offer a ‘‘neutralization theory’’, Cohen and Felson (1979) suggest a ‘‘routine
activity theory’’ (to include characteristics of the offended), Coleman (1985)
offers an ‘‘elite theory’’ before advocating for an ‘‘integrated theory’’
(Coleman, 1987), Braithwaite (1989) suggests a ‘‘theory of differential
shaming’’, Shapiro (1990) supports an ‘‘offense-based approach’’ (when
Sutherland followed an offender-based approach), Vaughan (2005) speaks
of a ‘‘normalization of deviance’’, and Benson and Simpson (2009) suggest
an ‘‘opportunity theory.’’ Berger (2011) also mentions ‘‘rational choice
theory’’, ‘‘control theory’’ and ‘‘criminogenic market structures theory.’’
6
All the persons he interviewed were men.
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 175
Cressey is not interested in identifying external factors that
may ‘‘explain’’ why certain problems become ‘‘non-share-
able.’’ Rather, he argues that misappropriation ensues from
the individual viewing his problems as non-shareable.
Finally, the third element is the notion of rationaliza-
tion, borrowed from Sutherland, but rede?ned according
to a very different view.
7
While Sutherland (1937) argues
that rationalization helps to explain why professional
thieves proudly consider themselves as such, Cressey
(1953) claims that embezzlers tend to rationalize their
behavior in ways that imply that deep down, they are hon-
est. Speci?cally, Cressey contends that, before committing a
violation, the person convinces himself that the act will not
compromise his identity as an honest person and that it con-
forms to a certain ethical view of himself. Cressey provides
illustrations of the most common rationalizations and points
out that this concept must not be confused with psycholog-
ical justi?cation carried out after the fact (Cressey, 1953, p.
viii). According to him, these rationalizations are produced
before the crime is committed and they are not used to
make the act intelligible for others, but rather for oneself
(p. 95): they make the act possible because they make it
morally acceptable. However, even though this argument
is rather convincing, Cressey bases his ?ndings on inter-
views carried out with prison inmates, i.e. after the fact
and in a situation of justi?cation vis-à-vis a stranger. His
interpretation of the process of rationalization, therefore, is
subject to criticism.
Overall, Cressey’s (1953) ?ndings do not tell us much
about sociological causes of ‘‘fraudulent’’ violations.
Mainly, they focus attention on the idea that embezzle-
ment is committed when an individual considers that his
situation makes the act of misappropriation feasible, nec-
essary and acceptable. Cressey focuses on phenomena lo-
cated within the individual – perceptions, opinions and
justi?cations that one gives to oneself. In so doing, his the-
orizing is consistent with individualistic explanations of
criminal behavior (Berger, 2011, p. 30), overlooking the mi-
cro-sociological (one’s immediate social and organizational
environment) as well as macro-sociological explanations
(broader historical, economic, and political factors). Cres-
sey’s work is thus based on a very particular conception
of white-collar crime that marginalizes social environ-
ments and circumstances.
Cressey thus offers a particular view of the offender:
privileging individualist motives of transgression, he
downplays the role of sociopolitical explanations, creating
an individualizing vision of white-collar crime which, as
shown below, is nevertheless capable of supplying argu-
ments to de?ne and justify an area of intervention for cer-
tain classes of professionals who claim jurisdiction over
the problem of organizational fraud (Abbott, 1988). Finally,
it is worth noting that Cressey (1953) does not stress the
word ‘‘fraud’’ in his book; the index indicates only one page
in which ‘‘fraudulent checks’’ is found, while ‘‘embezzle-
ment’’ is found on 24 pages.
Realizing translation through the constitution of a
knowledge claim
Although often attributed to Cressey, the term ‘‘fraud
triangle’’ does not appear in his writings. In fact, it was
not coined by a criminologist at all, but by Joseph Wells,
a CPA. However, drawing on Cressey, Wells and several
other proponents laid claim to a particular area of profes-
sional work while grounding it in a formal body of knowl-
edge ostensibly derived from scienti?c criminology.
Signi?cant translations were made in the process, espe-
cially when articulating a speci?c de?nition of fraud that
resulted in a number of departures or biases from the ori-
ginal criminological work. In what follows, we highlight
the main translations that Wells and other ACFE propo-
nents realized in attempting to build a network to natural-
ize the fraud triangle. Then, we examine some of the main
rhetorical strategies they used to secure support.
Translational biases in the initial formulations of the triangle
Wells played a leading role in formalizing the fraud tri-
angle – yet his position within de?nitional debates is not
neutral. As indicated below, the way in which he translated
criminological knowledge involves the creation of a system
of representations promoting a sense of causality between
individual character and fraud, which needs to be reined in
by the organization. In his 1997 book, Wells promotes a
conceptualization of fraud grounded in what is presented
as one of the cornerstones of criminological thought,
namely, the embezzlement ‘‘hypothesis’’ as originally con-
ceived by Cressey:
One of Sutherland’s brightest students at Indiana Uni-
versity during the 1940s was Donald R. Cressey
(1919-1987). While much of Sutherland’s research con-
centrated on upper world criminality, Cressey took his
own studies in a different direction. Working on his
Ph.D. in criminology, he decided his dissertation would
concentrate on embezzlers. Accordingly, Cressey
arranged the necessary permission at prisons in the
Midwest and eventually interviewed about 200 incar-
cerated inmates. [. . .] Cressey was intrigued by embez-
zlers, whom he called ‘‘trust violators.’’ He was
especially interested in the circumstances that led them
to be overcome by temptation. [. . .] Upon completion of
his interviews, he developed what still remains as the
classic model for the occupational offender. His
research was published in Other People’s Money: A Study
in the Social Psychology of Embezzlement. Cressey’s ?nal
hypothesis was: [see previous section, excerpt from
Cressey, 1953, p. 30]. (Wells, 1997, p. 10)
The transition from Sutherland to Cressey is quite
abrupt in Wells’ depiction of the historical origins of the
?eld’s formal body of knowledge. He also downplays the
role of the social context in Sutherland’s work. Yet in pre-
senting Cressey as one of Sutherland’s doctoral students,
he invokes a sense of progress and continuity in the devel-
opment of criminological knowledge. Importantly, the crit-
icisms that Cressey’s work engendered in the ?eld of
7
In fact, Cressey credits several scholars with authorship of this concept:
not only Edwin Sutherland, but also George Herbert Mead, Herbert Blumer,
Alfred Lindesmith and Charles Wright Mills (see Cressey, 1973, p. viii).
176 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
criminology are not mentioned. Hence the above initial
translation, from criminology to fraud examination, was
fundamentally partial – in both senses of the word (i.e.,
incomplete and biased).
The above excerpt, however, does not mention the term
‘‘fraud triangle.’’ We contacted the ACFE by email concern-
ing the origins of this term and received the following re-
sponse from an ACFE representative:
Dr. Cressey developed the three items, but he did not
call it the Fraud Triangle. Actually, Dr. Wells is the ?rst
person we know of to take the three items and put
[them] in a triangle format. He was working on a video
featuring Dr. Cressey in 1985, and he used a triangle
graphic in the video to illustrate the 3 factors that are
present in most white-collar offenses. He began using
the triangle graphic in training programs after that
time. People saw the graphic and began referring to it
as the Fraud Triangle over the years. So although we
have never undertaken an extensive review of its use,
as far as we know, that’s how it came about.
8
This quotation is noteworthy in several respects. From
practical experience, it is con?dently maintained that the
three factors ‘‘are present in most white-collar offenses.’’
This generalizing attitude may be linked to a systematic
shift from limited empirical cases to a broader label, as
if the original analysis had taken all types of white-collar
crimes into consideration and could, therefore, be general-
ized to every form of fraud. We found a similar tendency
to generalize in other ACFE documents, suggesting that
ACFE representatives are highly con?dent in the knowl-
edge base that allegedly underlies the fraud triangle
concept.
9
The latter also tends to be naturalized in these
documents, as indicated by the capital letters being used
in the last sentence of the excerpt (‘‘Fraud Triangle’’),
implying that the triangle is now understood as a
recognized doctrine, a proven theory or, quite simply, an
institution. Thus, the knowledge base claimed by the ACFE
is presented as universal:
Perceived pressure, perceived opportunity, and ratio-
nalization are common to every fraud. Whether the
fraud is one that bene?ts the perpetrators directly, such
as employee fraud, or one that bene?ts the perpetrator’s
organization, such as management fraud, the three ele-
ments are always present. (Albrecht & Albrecht, 2004, p.
20)
The triangle provides the core elements of the fraud
examination discipline’s body of knowledge. Importantly,
a vast range of enigmas and peripheral questions emerge
when application is taken into account. How is fraud com-
mitted? What mechanisms have been or should be used by
organizations in trying to rein in fraud? How effective are
these mechanisms? One of the most signi?cant questions
is – what kind of individual is more likely to commit fraud?
In the previous excerpt, for example, the main distinction
is between employees – assumed to commit frauds against
the organization – and management – assumed to commit
frauds for the organization. Pro?ling knowledge is enlisted
to address this question. Accordingly, the ACFE developed
categorizations of fraudsters and their acts along various
dimensions. For example, Wells (1997) mobilizes the re-
sults of a large-scale survey of Certi?ed Fraud Examiners
(CFEs), who were asked to provide information on actual
fraud cases. He presents series of graphs (chapter 1), which
collectively associate the imagery of the fraudster to the
pro?le of a married male, for instance. Predictive abilities
are emphasized in the text, through statements such as:
‘‘One of the most meaningful trends of the survey is the di-
rect and linear correlation between age and median loss’’
(Wells, 1997, p. 38).
One key emphasis in the Association’s body of evolving
knowledge is to associate fraud with moral issues. By his
de?nition, Wells (1997, pp. 3-6) assumes that fraud consti-
tutes a dishonest act perpetrated by an individual for per-
sonal enrichment. In other words, fraud is being rooted in
individuals’ frail morality (and not as an effect of broader
sociological and cultural in?uences) and as a problem
necessitating the surveillance of individual ethics by the
organization:
Fraud is a generic term, and embraces all the multifari-
ous means which human ingenuity can devise, which
are resorted to by one individual, to get an advantage
over another by false representations. No de?nite and
invariable rule can be laid down as a general proposi-
tion in de?ning fraud, as it includes surprise, trickery,
cunning and unfair ways by which another is cheated.
The only boundaries de?ning it are those which limit
human knavery. (Albrecht & Albrecht, 2004, p. 5)
This de?nition is centered on individual acts of moral
deviance. One of its most striking features is the use of
derogatory and persecutory language in qualifying these
acts. In a similar way, Wells’ moralizing tone infuses the
series of short cases he provides to demonstrate linkages
between certain behavioral patterns and fraud. Most often,
these cases question the morality of speci?c individuals,
without considering the surrounding network of institu-
tions and social interrelations. For instance, the practice
of background checks, which Wells actively promotes, sin-
gles out a category of individuals as problematic hires (see
also ACFE, 2010, p. 81):
The news that the hospital had unknowingly hired a
convicted felon distressed [the director of internal
auditing in charge of investigating the case of an
employee who regularly overstated the number of
hours on his time sheets]. He discovered that the hospi-
tal’s ability to conduct thorough background checks on
prospective employees was restricted by money and
accessibility to records. [. . .] Harkanell [i.e., the person
who defrauded the hospital] remained at large for sev-
eral months. But luck was on the hospital’s side. Or, per-
haps more accurately, stupidity was on Harkanell’s. Just
as he had done with his time-sheet fraud, he left a clue
8
Email received on May 27, 2011 from a representative of the ACFE. In
2010, Joseph Wells received a Doctorate Honoris Causa from the York
College of The City University of New York, hence the use of the title ‘‘Dr.’’
in the ACFE’s email.
9
See Gabbioneta, Greenwood, Mazzola, and Minoja (2013) for a study of
fraud practitioners’ overcon?dence.
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 177
behind, this time concerning his whereabouts. (Wells,
1997, p. 263)
The overarching ‘‘lesson’’ fromthis example seems to be
that organizations should be reluctant to hire people with
a criminal record, regardless of the circumstances in which
they were convicted. This is reinforced in an article pub-
lished in the ACFE’s newsletter, in which an actual case is
developed through text and video to promote the view that
moral deviants are unlikely to rehabilitate. As stated by the
ACFE president: ‘‘I’ve had fraud perpetrators tell me that it
became an addiction for them. [. . .] Trust equals opportu-
nity – and it is indeed common for a fraudster to perpetrate
a second fraud when they get in a position of trust’’ (Patt-
erson, 2008).
10
From this perspective, moral deviancy con-
stitutes an incurable illness and the best that can be done
in the face of it is to strengthen an organization’s internal
controls to catch fraudsters and place them in the hands of
justice. Our analysis, therefore, points to fraud being concep-
tualized, in the ACFE’s community, from an angle that views
the problem of fraud as one of morality lapses upon which
the organization inescapably needs to intervene.
Thus, from the triangle’s perspective, individual moral-
ity is perceived as a chief source of fraud and the organiza-
tion is presented as having prime responsibilities in
establishing a proper structure to control moral deviancies.
In other words, the triangle provides fraud specialists with
an investigative template that individualizes fraud and
holds organizations responsible for controlling it. As a re-
sult, fraud is circumscribed to the realm of the speci?c:
individuals subjected to pressure and somehow able to
rationalize the act should not be left in a position to commit
fraud. From this perspective, it is incumbent on the organi-
zation to ensure that the three legs of the triangle are prop-
erly overseen through a rigorous structure of internal
control. Fraud is thus constituted as a problem at the con-
?uence of the individual and the organization; it is certainly
not represented as a social, political, or historical problem.
The translations developed in the ACFE community rep-
resent a signi?cant departure from Sutherland and even
from Cressey. For instance, Wells (1997, p. 17) translates
Cressey’s notions of ‘‘position of trust’’ and ‘‘violation of
trust’’ to emphasize the need for systematic controls:
‘‘since [an employee] is in a position of trust (read: no
one is checking) it can be violated.’’ Although Wells
(1997, p. 11) mentions the notion of non-shareable prob-
lem brie?y, this central aspect of Cressey’s hypothesis is re-
placed with the notion of ‘‘pressure.’’ This notion misses a
central element of Cressey’s work whereby a ‘‘sequence of
events’’ is present when a violation of trust is committed
and not present when no transgression is observed (Cres-
sey, 1953, p. 12). Indeed, Cressey resolutely maintains that
people in a position of trust in an organization, who are
subjected to ?nancial pressure for several years, do not vio-
late this trust until their ?nancial problems are felt as non-
shareable.
In addition, Wells (1997, p. 24) relates perceived
opportunity to lack of deterrence by management, as ob-
served through de?cient internal controls. The triangle
also translates ‘‘rationalization’’ in a very speci?c man-
ner. Wells (1997, p. 17) claims that it is part of human
nature: ‘‘once the line is crossed, the illegal acts become
more or less continuous.’’ Overall, in the eyes of the tri-
angle’s proponents, the likelihood of giving in to pressure
characterizes certain groups of individuals. Cressey’s
hypothesis that fraud is ?rst and foremost explained by
individuals’ perceptions is thus replaced by another indi-
vidualizing stance now focused on personality and
morality.
These departures from Cressey’s work are justi?ed by
the age of the original research: ‘‘The study [Cressey,
1953] is nearly half a century old. There has been consider-
able social change in the interim. And now, many antifraud
professionals believe there is a new breed of occupational
offender – one who simply lacks a conscience suf?cient
to overcome temptation’’ (Wells, 1997, p. 20). Wells even
reintroduces ‘‘genetic causes’’ and argues that, in contrast
to white-collar crimes, what he calls ‘‘street crimes’’ are
genetically based (Wells, 1997, p. 9). Wells (1997, p. 24)
further modi?es ‘‘Cressey’s ?nal hypothesis’’ to make the
fraud triangle consistent with ‘‘the fraud scale’’ (see also
Albrecht, Romney, & Howe, 1984, p. 21) where the three
dimensions can offset each other, non-shareable problems
are replaced by situational pressures and rationalizations
by personal integrity. The fraud triangle has thus trans-
lated Cressey’s work into a device to be used in organiza-
tions to measure and intervene on fraud risks associated
with deviant morality.
In summary, our analysis indicates that the creation of
a fraud examination knowledge base entailed substantive
translations from the ?eld of criminology, in that Cres-
sey’s ?ndings are introduced as an indisputable and gen-
eralizable foundation for the practice of fraud
specialization to thrive. The initial translation was meta-
phorically built around the fraud triangle, a concept that
constitutes the hard core of the discipline while providing
enough room for imagination in developing ancillary
translations that extend the scope of the triangle in terms
of technical and application details. From these transla-
tions emerges a broader discourse that de?nes fraud as
a problem that fundamentally relates to malevolent acts
perpetrated by individuals whose morality is at best frail
and at worst nonexistent. Thus, when fraud examiners
talk about systems, the scope is tightly limited to the
boundaries of the organization’s internal control system.
In short, the translations surrounding the fraud triangle
promote a vision that con?dently individualizes fraud to
the point where a stigmatizing judgment sometimes is
readily passed on moral deviants who succumb to ?nan-
cial pressures and make use of an organizational opportu-
nity in order to remorselessly defraud their employing
organization. The latter is rendered accountable in the
process, being enlisted in establishing a proper control
structure around fraudulent risk. As a result, both individ-
ual and organization are likely to share blame when
fraudulent behavior takes place in a given organizational
setting.
10
Patterson (2008) provides video recordings of an individual who, after
serving a sentence for ?nancial fraud, explains that, like an alcoholic, he is
now incurable: this individual asks that he no longer be trusted because he
knows that he will once again betray this trust.
178 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
Building a network of support to naturalize the triangle
Our analysis indicates that the ACFE houses the main
architects of the initial fraud triangle concept. After work-
ing for the FBI for about ten years, Wells started a profes-
sional service ?rm in 1982, specializing in fraud
detection and prevention. Wells founded the ACFE a few
years later, in 1988. The ACFE’s mission is ‘‘to reduce the
incidence of fraud and white-collar crime and to assist
the Membership in fraud detection and deterrence.’’
11
As
of May 2011, the Association comprised over 55,000 mem-
bers (65,000 in April 2013) – with more than 30,000 being
CFEs and the remainder being students and associate mem-
bers.
12
Certi?cation implies passing a compulsory examina-
tion and completing two years in a fraud detection or
prevention-related position. CFEs’ key abilities reportedly
include identifying an organization’s vulnerability to fraud,
examining records to detect and trace fraudulent transac-
tions, conducting interviews to obtain information, and giv-
ing advice on improving fraud prevention and deterrence.
13
The ACFE’s formal body of knowledge comprises a mix of
theoretical, methodological and deontological elements
relating to accounting/auditing, information technology,
criminology, ethics, fraud investigation/schemes, interview-
ing skills, and law.
14
Apparently, CFEs are held in high re-
gard; statements by representatives of Robert Half
International, the U.S. Department of Defense and the U.S.
Government Accountability Of?ce attest to this.
15
The ACFE uses an extensive network of resources to
promote the claim that it possesses a formal body of
knowledge derived from criminology, in the hope of secur-
ing its jurisdiction and, at the same time, legitimizing its
views on the essence of fraud and how it should be con-
trolled. Every year since 1989, the ACFE has bestowed
the Cressey Award ‘‘for a lifetime of achievement in the
detection and deterrence of fraud’’ on a member who best
contributed to ‘‘the ?ght against fraud.’’ The Award is
named ‘‘in honor of one of the country’s foremost experts
on fraud and a founding father of the ACFE, Dr. Donald R.
Cressey’’ (Association of Certi?ed Fraud Examiners (ACFE),
2013).
16
Further, the ACFE organizes annual conferences
with each of the latest ones reportedly attracting over
2000 attendees. Roughly every two years, it publishes an
extensive survey report entitled, Report to the Nation(s),
which draws on information from a large sample of CFEs
to provide an approximation of the cost of fraud in the econ-
omy and detailed knowledge on fraud types and perpetra-
tors. The ACFE also publishes the Fraud Magazine, a
bimonthly publication on white-collar crime and fraud
examination practices, while its website indicates a research
unit comprising nine staff members (May 2011), as well as
22 ‘‘faculty members’’ described as ‘‘some of the most
highly-rated speakers in the anti-fraud profession.’’
17
The
ACFE’s efforts in developing a formal and practically-ori-
ented knowledge base are numerous – for instance through
the creation of the Institute for Fraud Prevention, described
as a ‘‘coalition dedicated to multi-disciplinary research, edu-
cation and prevention of fraud and corruption.’’
18
The ACFE
has been particularly involved in disseminating its represen-
tations in colleges and universities through an ‘‘anti-fraud
education partnership’’ in which institutions are encouraged
to develop a course on ‘‘fraud examination,’’ using extensive
educational material that the ACFE provides free-of-charge.
In 2010, nearly 400 post-secondary institutions worldwide
reportedly took advantage of this opportunity (Carozza,
2010).
Typically, books, articles and documents produced by
Wells and the ACFE are peppered with survey results. This
gives the impression that the fraud examination ?eld is
committed to building a knowledge base predicated on
methodologically rigorous and generalizable knowledge
(as opposed to the production of knowledge focused on
contextualizing). This kind of rhetoric is increasingly
appealing given the emphasis on generality, mobility, com-
parability and standardization in today’s society (Porter,
1995; Reed, 1996). The ACFE has continued and expanded
its categorizing endeavors, producing several Reports to the
Nation(s).
19
In the 2010 Report to the Nations, information
obtained from a sample of CFEs, who documented a total
of 1843 cases of occupational fraud, is presented in numer-
ous graphs and ?gures (ACFE, 2010). One of the most pecu-
liar aspects of the Report is how far claims go to provide a
sense of effectiveness regarding some of the anti-fraud tech-
niques advocated by the ACFE. For instance, the following
excerpt describes a type of effective intervention:
The ability to report fraud anonymously is key because
employees often fear making reports due to the threat
of retaliation from superiors or negative reactions from
their peers. [. . .] One would expect that the presence of
a fraud hotline would enhance fraud detection efforts
and foster more tips. This turns out to be true. As seen
on page [x], the presence of fraud hotlines correlated
with an increase in the number of cases detected by a
tip. In organizations that had hotlines, 47% of frauds
were detected by tips, while in organizations without
hotlines, only 34% of cases were detected by tips. This
is important because tips have repeatedly been shown
to be the most effective way to catch fraud. [. . .] Perhaps
more important, [. . .] organizations that had fraud hot-
lines suffered much smaller fraud losses than organiza-
tions without hotlines. (ACFE, 2010, p. 17)
11
Read on April 12, 2013 on www.acfe.com/who-we-are.aspx.
12
Taken from an e-mail communication with one ACFE’s member
services representative (May 23, 2011).
13
Read on May 25, 2011 on www.acfe.com/documents/press-kit/acfe-
certi?ed-fraud-examiners.pdf.
14
Read on April 12, 2013 on www.acfe.com/self-study-cpe.aspx.
15
Read on May 25, 2011 on www.acfe.com/documents/about-acfe.pdf.
16
It is worth noting that Cressey died in 1987, about one year before the
creation of the ACFE (Wells, 1997, p. 22). According to Wells, Cressey
expressed, during a conversation with him, the idea that ‘‘it was time for a
new type of ‘corporate cop’ – one trained in detecting and detecting the
crime of the future: fraud’’ (Wells, 1997, p. 22).
17
R e a d o n Ma y 2 5 , 2 0 1 1 o n www. a c f e . c o m/ a b o u t /
faculty.asp?copy=faculty.
18
Excerpt from www.theifp.org/ – May 25, 2011.
19
The 2010 Report is the ?rst in the series whose data is drawn from fraud
cases not constrained to the USA – hence the use of the term ‘‘nations.’’ This
suggests that the Association is increasingly involved on the transnational
scenery, along entities such as the International Federation of Accountants
and the International Accounting Standards Board.
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 179
Knowledge on the effectiveness of control mechanisms
is required for sensible intervention to take place, thereby
putting pressure on organizations to adopt such mecha-
nisms – otherwise they may be viewed as negligent. Signif-
icant energy is also devoted to the development of formal
lists of symptoms and other tools designed to help recog-
nize fraud. Diverse categories of symptoms have been
identi?ed: accounting anomalies, extravagant lifestyles,
and a psychologically-predicated category, namely, unu-
sual behaviors:
Research in psychology indicates that when people
(especially ?rst-time offenders, as many fraud perpetra-
tors are) commit a crime, they are overwhelmed by fear
and guilt. These emotions express themselves in an
extremely unpleasant physical response called stress.
Individuals then exhibit unusual and recognizable cop-
ing mechanisms. [. . .] People who are normally nice
become intimidating and belligerent. People who are
normally belligerent suddenly become nice. (Albrecht
& Albrecht, 2004, p. 99)
Coping mechanisms include insomnia, unusual irritabil-
ity, inability to relax, inability to look people in the eyes,
defensiveness, sweating and increased smoking (p. 100).
Consequently, fraud investigators are encouraged to be
alert to any behavioral changes surrounding them. Yet
the art of the skilled examiner is to separate the wheat
from the chaff, which is recognized as being challenging
(Albrecht & Albrecht, 2004, p. 103) given the impact of
unwarranted investigations on the examiner’s reputation
and the professional liability potentially involved:
In putting forward your best efforts to detect fraud,
you’ll be tempted to try too hard sometimes. You will
weigh in your mind whether you should take an unau-
thorized look at the suspect’s bank account; you’ll wres-
tle with the dilemma of whether to secretly check the
fraudster’s credit records. Don’t do it. Overreaching an
investigation or fraud examination is the quickest way
to ruin it. Not only will you be unsuccessful in proving
your case, you will subject yourself to possible criminal
and civil penalties. (Wells, 1997, p. 427)
Following the example of ?nancial auditing (Power,
1994), but perhaps in a more pronounced way, the fraud
expertise discipline supports a climate of suspicion; it is
as if to secure their jurisdiction, fraud specialists seek to re-
mind people, organizational decision-makers especially, of
the threat of fraud being constantly present in their sur-
roundings. The concluding sentence in Wells’ (1997, p.
528) book is particularly revealing in this respect: ‘‘And
since most people don’t start their careers to become liars,
cheats, and thieves, it is the fraud examiner’s job to ensure
they do not end up that way.’’ That is, there is a potential
for everyone to become a fraudster if the surrounding con-
ditions, especially those within the organization, are con-
ducive to this type of behavior. In a similar way:
Past research has shown that anyone can commit fraud.
Fraud perpetrators usually cannot be distinguished
from other people by demographic or psychological
characteristics. Most fraud perpetrators have pro?les
that look like those of other honest people. (Albrecht
& Albrecht, 2004, p. 18)
Such generalizing statements, however, mix with risk
pro?ling statements in ACFE’s discourse. Fraud risk is both
widespread and related to certain categories of people.
Probabilistically, everyone is tied to some likelihood of
committing fraud – yet it appears that the likelihood is
higher for certain pro?les. As such, the categorizing
schemes institutionalized in the discipline emphasize the
threat of speci?c categories of individuals more likely to
act in immoral ways: former prisoners, drug users, gam-
blers, etc. Suspicion is, therefore, especially targeted to-
wards certain categories of individuals, re?ecting some
deeply-ingrained beliefs that have historically stigmatized
certain groups in society (Goffman, 1963). Further, some
data points to speci?c categories of employees as being
more likely to be involved in fraudulent cases, while indi-
rectly suggesting that fraud risk permeates every organiza-
tion since these categories apply everywhere:
The six most common departments in which fraud per-
petrators worked were accounting, operations, sales,
executive/upper management, customer service and
purchasing. Collectively, these six departments
accounted for 77% of all cases reported to us. As the
chart on the following page illustrates, the distribution
of cases based on the perpetrator’s department was
remarkably similar to the distribution in our 2010
study. (ACFE, 2012, p. 51)
The general impression that emerges from the material
we analyzed is one of doubt and wariness – that every em-
ployee, citizen or corporation might harbor wrongdoing.
Fraud, as conceptualized through the lens of the fraud
triangle and its intellectual rami?cations, can occur every-
where. Yet some individuals are riskier than others. This is
why, as the rhetoric goes, fraud can be everywhere;
‘‘abnormal’’ gestures or words should be construed as
symptoms of fraud. Along these lines, Wells (1997, p.
511) weaves wider webs of suspicion:
The cases we have seen on the preceding pages were, by
and large, on the extreme edge of abusive conduct by
employees. In short, this data is merely the tip of the
iceberg. How deep and massive that iceberg is varies
from one organization to another, depending on a com-
plex set of business and human factors. [. . .] Obviously
the more rules within the organization, the more
employees are likely to run afoul of them. [. . .] Tom R.
Tyler, in his book Why People Obey the Law concluded
overwhelmingly that individuals obey only laws they
believe in. If a rule makes no sense to the employees,
they will make their own.
In the above quotation, Wells employs a series of per-
suasive tactics in arguing that fraud constitutes a massive
organizational problem that must be addressed. The meta-
phor of the iceberg is interesting, since it surrounds fraud
with images of vastness and uncertainty. The clear-cut
tone Wells uses is also noteworthy: employees will
undoubtedly tend to break rules that do not make
sense to them, if they have the opportunity to do so. This
180 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
uncompromising assertion is authoritatively supported
with a reference to a book written by an academic (Tyler,
2006) specializing in psychology and law. Consistent with
this stance, organizations that are passive in terms of
implementing specialized approaches and recipes aimed
at controlling the risk of fraud are ?rmly criticized with
the bene?t of hindsight and wisdom:
If there is a lesson to be learned here, it is that audit
functions are in place for a reason and should never
be overlooked. Unfortunately for the [defrauded] chari-
table organization, they were reminded of this lesson
the hard way. (Wells, 1997, p. 156)
Not only does the triangle offer a scheme to explain
why fraud is committed, but it also provides a basic tem-
plate for intervention – thereby rendering the organization
responsible for establishing a proper internal control struc-
ture. The following metaphorical analogy explicitly estab-
lishes a central linkage between fraud explanation and
intervention:
Fraud resembles ?re in many ways. For a ?re to occur,
three elements are necessary (1) oxygen, (2) fuel, and
(3) heat. These three elements make up the ‘‘?re trian-
gle,’’ [. . .]. When all three elements come together, there
is ?re. Fire?ghters know that a ?re can be extinguished
by eliminating any one of the three elements. [. . .] As
with the elements in the ?re triangle, the three ele-
ments in the fraud triangle are also interactive. With
?re, the more ?ammable the fuel, the less oxygen and
heat it takes to ignite. [. . .] With fraud, the greater the
perceived opportunity or the more intense the pressure,
the less rationalization it takes to motivate someone to
commit fraud. [. . .] People who try to prevent fraud usu-
ally work on only one of the three elements of the fraud
triangle – opportunity. Because fraud-?ghters generally
believe that opportunities can be eliminated by having
good internal controls, they focus all or most of their
preventive efforts on implementing controls and ensur-
ing adherence to them. (Albrecht & Albrecht, 2004, pp.
20-21)
One of the key implicit messages in the above excerpt is
to make the organization accountable for reining in the risk
of fraud. As any responsible community cannot leave ?re
unattended, any responsible organization must establish
a proper structure of control around fraud; a failure to do
so is bluntly viewed as carelessness. In this way, fraud spe-
cialists promote the obvious necessity of their expertise,
which is presented as making a difference in dealing with
problems that can have dire consequences on the negligent
organization. It should not be surprising, then, to see fraud
examination being highlighted as a growing career
opportunity:
As the number of frauds and the amounts of fraud
losses increase, so do the opportunities for successful
careers in fraud-?ghting. In fact, just recently, U.S. News
and World Report identi?ed fraud examination as one
of the fastest growing and most ?nancially rewarding
careers. The American Institute of Certi?ed Public
Accountants recently touted fraud examination/fraud
auditing as one of the six fastest growing and most prof-
itable opportunities for accountants (Albrecht & Albr-
echt, 2004, pp. 13-14).
Further, the ACFE maintains that to establish a proper
control structure, the organization should set up an appro-
priate ‘‘control environment’’:
Having an effective control structure is probably the
single most important step organizations can take to
prevent and detect employee fraud. [. . .] The control
environment is the work atmosphere that an organiza-
tion establishes for its employees. The most important
element in an appropriate control environment is man-
agement’s role and example. There are numerous
instances in which management’s dishonest or inappro-
priate behavior was learned and then modeled by
employees. (Albrecht & Albrecht, 2004, p. 27)
The emphasis on control environment is presented as
being experientially supported. The bar is set very high
for top managers, who should ensure not only that
appropriate control mechanisms are established
throughout the organization, but that they behave
appropriately at all times. Any temporary deviance from
the dominant set of moral prescriptions is viewed as
having the potential to engender dire cultural conse-
quences, given the presumed behavioral isomorphism
?owing from top to bottom in the organization. The
point is that considering control issues seriously and
meticulously is a key attitude that top managers should
manifest at all times.
One of the key points to retain from our analysis thus
far is that, by formulating a knowledge claim grounded
in what is represented as uncontroversial, fraud specialists
legitimize and disseminate a peculiar discourse about
what fraud is, what its causes are, and who is responsible
for controlling it. The triangle is represented as the core
of fraud examination expertise, surrounded with a constel-
lation of applied knowledge re?nements to ensure that
fraud examination expertise can be meaningfully used in
concrete situations. This constellation is always under
development, consistent with the image of a discipline that
genuinely aims for continuous progress in its quest to
dominate fraud. It focuses on character traits of perpetra-
tors, probabilities associated with fraud risk, and control
mechanisms to be implemented within organizations.
One of the main emphases is that the fraud problem can,
and should, be controlled by the organization through
the implementation of well-tried anti-fraud techniques –
although the limitations of fraud control are sometimes
prudently recognized in ACFE rhetoric, perhaps in an at-
tempt not to set the audiences’ expectations of effective-
ness at an excessively high level:
The dream of many in the accounting community is to
develop ‘‘new’’ audit techniques which will quickly
and easily point the ?nger of suspicion. To those inno-
cent souls, good luck. Regardless of the ability of com-
puters to automate a great deal of drudgery, there are
no new audit techniques, and there haven’t been any
for the last several centuries. (Wells, 1997, p. 526)
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 181
The chains of translations produced around the fraud
triangle thus attempt to build a network of support around
a notion of fraud highlighting the responsibility of individ-
ual morality and the necessity to build vigilant organiza-
tions. In the next section, we examine how this network
subsequently escaped the limits of fraud examination
and colonized other ?elds of intervention.
Moving downstream in the chain of translations:
extending the network
Intermingling with the AICPA
The fate of any claim, including knowledge claims, lies
in others’ hands (Latour, 1987). The ACFE’s claim to exper-
tise, grounded in the imagery of the triangle, spread be-
yond its con?nes, thus extending the chain of
translations to surrounding communities. In particular,
the following auditing standards were inspired by ACFE’s
work, although none of them explicitly mentions the
‘‘fraud triangle’’: Statement on Auditing Standards 99,
‘‘Consideration of Fraud in a Financial Statement Audit,’’
introduced by the AICPA to replace SAS 82 after the intro-
duction of the Sarbanes-Oxley Act in the United States
(American Institute of Certi?ed Public Accountants (AIC-
PA), 2002); and International Standard on Auditing 240,
‘‘The Auditor’s Responsibilities Relating to Fraud in an
Audit of Financial Statements’’ (IFAC, 2006).
20
In these standards, ‘‘fraud risk factors’’ are grouped in
three ‘‘conditions that indicate incentives/pressures to per-
petrate fraud, opportunities to carry out the fraud, or atti-
tudes/rationalizations to justify a fraudulent action’’
(AICPA, 2002, paragraph 31, p. 16; see also IFAC, 2006, par-
agraph 24, section A25, p. 174). As in Wells’ writings
(1997), the non-shareable ?nancial problem has disap-
peared and been replaced by an incentive or pressure to
commit fraud, while the notion of rationalization is linked
with that of attitude, thus shifting closer to the idea of indi-
vidual morality:
Three conditions generally are present when fraud
occurs. First, management or other employees have an
incentive or are under pressure, which provides a reason
to commit fraud. Second, circumstances exist—for
example, the absence of controls, ineffective controls,
or the ability of management to override controls—that
provide an opportunity for a fraud to be perpetrated.
Third, those involved are able to rationalize committing
a fraudulent act. Some individuals possess an attitude,
character, or set of ethical values that allow them to
knowingly and intentionally commit a dishonest act.
However, even otherwise honest individuals can com-
mit fraud in an environment that imposes suf?cient
pressure on them. The greater the incentive or pressure,
the more likely an individual will be able to rationalize
the acceptability of committing fraud. (AICPA, 2002,
paragraph 7, p. 8)
Readers may ?nd this translation of Wells’ work by the
AICPA (and the International Federation of Accountants –
IFAC) rather surprising. To begin with, the transposition
to accounting fraud is not questioned:
Even if Cressey’s ?ndings for embezzlers were valid,
there is little evidence to support the fraud triangle as
a general theory of ?nancial crime. The convoluted con-
nection between Other People’s Money and SAS No. 99
suggests that the endorsement of the fraud triangle by
the AICPA occurred without serious consideration of
other criminology perspectives. (Donegan & Ganon,
2008, p. 3)
Second, in contrast with Cressey (1953) giving less
weight to ‘‘opportunity,’’ the notion that is central for both
the AICPA and IFAC is, indeed, that of opportunity, whose
dimensions are close to those of internal control. Third,
replacing the concept of a non-shareable ?nancial problem
with those of incentive and pressure means that the iden-
ti?cation of factors that may have led the individual to
commit fraud, is pushed even further into the background.
The notion of incentive is based on the idea that the fraud-
ster has ‘‘a reason to commit fraud.’’ Finally, rationalization
is overshadowed by an attitudinal stance that is prone to
committing fraud: individuals with a ‘‘character or set of
ethical values which allow them to knowingly and inten-
tionally commit a dishonest act.’’ This reintroduction of
moral traits, anchored relatively permanently in the iden-
tity of individuals, as an explanation for fraudulent behav-
ior is far removed from the spirit of many writings in
criminology, including those of Cressey and Sutherland.
This rede?nition of the three branches of fraud identi-
?ed by Cressey allows us to better understand the defor-
mation mechanisms at work in the translation of
criminology research, such as it was redeployed in the
fraud examiner and auditing community. The notion of a
non-shareable ?nancial problem has been replaced with
those of incentive and pressure, and perception of opportu-
nity with a failure in internal controls. These changes are
not only a matter of replacing subjective, hard-to-observe
elements with procedures in documentation and measure-
ment that have already been mastered and put in place;
they also imply subjecting any effort to understand the
causes of fraud to the will to manage the related risks.
Cressey’s causal view has been abandoned in favor of the
notion of risk.
For example, in their appendices the two standards pro-
vide examples of risk factors for fraud that are very similar
to what was presented in previous standards, but this time
they are organized systematically according to the three
dimensions of the triangle. They are also separated into
two parts: the ‘‘risk factors relating to misstatements aris-
ing from fraudulent ?nancial reporting’’ (AICPA, 2002, pp.
44–48; IFAC, 2006, pp. 186–189) and the ‘‘risk factors
relating to misstatements arising from misappropriation
of assets’’ (AICPA, 2002, pp. 48–50; IFAC, 2006, pp. 189–
191). The former concern accounting fraud and can be
attributed more to the behavior of top managers, whereas
20
This is not the only in?uence that Cressey had on auditing practices: he
also participated (with Charles Moore) in a study commissioned by Peat
Marwick & Mitchell whose ?ndings, submitted in 1980, underscored the
importance of ‘‘tone at the top’’ (Cressey & Moore, 1983).
182 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
the latter concern individuals or groups of individuals who
defraud their employer for their own bene?t; these are
what Cressey (1953) calls embezzlement. The incentives
identi?ed for accounting fraud relate to the highly compet-
itive environment of the organization, the pressure faced
by managers to reach ?nancial targets and the ?nancial
stake that executives may have in their organization.
Opportunities relate to the complexity and lack of trans-
parency in the organization’s operations and to de?cien-
cies in internal controls. Rather tricky to observe, the
attitude of management may be evaluated by examining
its level of commitment and communication on ethical val-
ues, the attention paid to short term results and its ten-
dency to commit to unrealistic ?nancial forecasts.
21
As stated in the standard, ‘‘fraud risk factors do not nec-
essarily indicate the existence of fraud; however, they of-
ten are present in circumstances where fraud exists’’
(AICPA, 2002, paragraph 31, p. 16; see also IFAC, 2006,
paragraphs A23–A27, p. 161).
22
Like the symptoms of a dis-
ease, the presence of risk factors implies that one must be
conscious of the possibility of fraud, even though no causal
relationship can actually be established between fraud and
the underlying risk factors. Since risk, by de?nition, can
materialize anytime, the standards tend to promote a cli-
mate of suspicion justifying the reinforcement of organiza-
tional surveillance.
Our analysis also indicates connections between the
ACFE and auditing standard setters. Indeed, Wells partici-
pated in drafting an ‘‘exhibit’’ (‘‘Management Antifraud
Programs and Controls. Guidance to Help Prevent, Deter,
and Detect Fraud’’) associated with SAS 99 (AICPA, 2002,
pp. 57–77) and issued jointly by different associations,
including the ACFE. Further, SAS 99 recommends calling
in fraud examiners – identi?ed as key participants in the
antifraud effort – to work with the organizations’ adminis-
trators and auditors (AICPA, 2002, pp. 59; 76). This alliance
between two associations must be placed within the con-
text of the ?nancial scandals of 2001–2002:
When the AICPA belatedly recognized the need to con-
sider why so many accountants were committing fraud
they turned to the ACFE, which, in effect, meant
embracing Cressey’s perspective. Adopting the program
of a group of dedicated fraud ?ghters was doubtlessly a
useful way to burnish the profession’s tarnished image
in 2002. The triangle had the added advantage of
explaining fraud as the action of a loner driven by need,
taking advantage of a lack of internal control. Thus the
deterrent to fraud was more internal control, and the
search for the culprit could focus on individual offend-
ers, not on the culture that may have encouraged and
rewarded their actions. (Donegan & Ganon, 2008, p. 3)
Perhaps as a partial result of its endorsement by the
AICPA, the fraud triangle notion, which was practically
non-existent in the press until 1999 (Factiva database),
gained visibility after the 2001–2002 ?nancial scandals
(see Table 1). The same happened to the acronym ACFE
and the expression ‘‘fraud examiner(s),’’ both became
increasingly well-known, especially from 2002 onward.
One strength of the triangle is found in its ability to inter-
est heterogeneous audiences; CFEs were using it to expand
their professional jurisdiction, while accounting and audit-
ing professional associations were trying to reassert,
through the triangle, their legitimacy as guardians of trust
after accounting fraud scandals. Although these groups
arguably had different views on how and why to use the
fraud triangle, they shared an interest in promoting it
and its underlying vision of fraud.
All in all, it appears that the turning point in the early
2000s created a context that was favorable to an increased
use of the fraud triangle. As such, our analysis indicates
that the triangle has become an important concept in
establishing jurisdiction over fraud and in making the
organization responsible for the control of its members’
moral deviancies. Of course, instances of triangle use are
not limited to mere diffusion; the chains of translations ex-
tended beyond the ACFE community. Now, we trace, in
more detail, the web of downstream translations, using
the 64 articles that we identi?ed (mostly in academic/edu-
cational journals but also in a number of professional and
hybrid journals) – as speci?ed in our research methods
section.
Justifying the emphasis on internal control
A number of recent articles incorporate the fraud trian-
gle within the core of their argument. Some articles aim to
Table 1
Number of documents referring to the fraud triangle.
Year(s) Fraud triangle
a
Fraud examination
b
1979–1993 1 148
1994 0 68
1995 0 92
1996 1 94
1997 2 123
1998 2 199
1999 2 197
2000 5 210
2001 6 202
2002 9 369
2003 12 400
2004 11 473
2005 10 488
2006 16 502
2007 17 552
2008 21 624
2009 39 878
2010 39 817
2011 49 1092
Total 242 7508
a
Results of a query sent to the Factiva database, without specifying any
source, for the exact term ‘‘fraud triangle’’.
b
Results of a query sent to the Factiva database, without specifying any
source, using the request ‘‘fraud examiner OR fraud examiners OR ACFE’’.
21
We see here how auditing standard-setting bodies translate the
triangle into ‘‘actionable’’ knowledge which gives them power over reality.
Through various problematization and categorization processes, profes-
sional associations produce a normative tool that creates and solidi?es
areas of intervention for their members.
22
IFAC’s formulation is slightly different: ‘‘While fraud risk factors may
not necessarily indicate the existence of fraud, they have often been present
in circumstances where frauds have occurred.’’
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 183
explain and illustrate fraud triangle dimensions to auditing
and accounting professionals (Buckhoff, 2001; Conley,
2000; Durbin, 2006; Holzinger, 2010; Murdock, 2008; Pet-
erson & Zikmund, 2004; Ramos, 2003). Others provide case
studies for teaching future auditors or managers (Bailey,
2004; Clayton & Ellison, 2011; Fleak, Harrison, & Turner,
2010; Howe & Malgwi, 2006; McKnight, Manly, & Carr,
2008; Michelman, Gorman, & Trompeter, 2011; Peterson
& Gibson, 2003). Several draw heavily from the fraud trian-
gle when elaborating their conceptual framework (Cohen,
Ding, Lesage, & Stolowy, 2010; Murphy, 2012; Murphy &
Dacin, 2011; Srivastava, Mock, & Turner, 2007, 2009; Stu-
ebs & Wilkinson, 2010; Wilks & Zimbelman, 2004). In so
doing, these studies borrow the de?nition of their core
concept and dimensions to be used in their categorization
work from a professional organization. Some studies also
posit that fraud triangle dimensions can predict the pres-
ence of fraud within an organization (Cohen et al., 2010;
Murphy, 2012; Murphy & Dacin, 2011; Wilks & Zimbel-
man, 2004). A number of these articles tend to naturalize
the fraud triangle, whose basic principles and assumptions
are not questioned.
However, empirical tests of the practical effectiveness
of the fraud triangle model and of its descriptive quality
are, to our knowledge, scarce and unconvincing (e.g.,
Strand Norman, Rose, & Rose, 2010; Wilks & Zimbelman,
2004). Some scholars sought to compare the performance
of undergraduate business students, who received training
on the fraud triangle, to those that received training on the
COSO model (Hansen & Peterson, 2010; LaSalle, 2007), but
their ?ndings are not conclusive. Wilks and Zimbelman
(2004) show that the triangle is only effective (for external
auditors) in cases where risk is perceived to be low, while
Strand Norman et al.’s (2010) results indicate that the use
of the triangle by internal auditors does not improve the
assessment of fraud risk.
Other articles draw on the fraud triangle, but modify
its terms. Most of them use the ACFE and AICPA terminol-
ogy rather than Cressey’s; the notion of a non-shareable
problem almost never appears. Pressure, motive or need
(e.g., Fitzsimons, 2009; Murdock, 2008) usually replace
it. Some of these shifts are more signi?cant than others.
For example, Rae and Subramaniam (2008) replace pres-
sure and rationalization with the notion of organizational
justice, whose absence incites fraudsters to act and legit-
imize their actions. The vast majority of authors replace
opportunity with the effectiveness of internal control
(Albrecht, Albrecht, & Albrecht, 2004, 2010; Alleyne &
Howard, 2005; Clayton & Ellison, 2011; Fleak et al.,
2010; Hillison, Pacini, & Sinason, 1999; Kelly & Hartley,
2010; Peterson & Gibson, 2003; Rae & Subramaniam,
2008; Ravisankar, Ravi, Raghava Rao, & Bose, 2011;
Srivastava et al., 2009; Strand Norman et al., 2010) and
rationalization with the morality of the organization’s
members (Albrecht, Turnbull, Zhang, & Skousen, 2010;
Cohen et al., 2010; Hillison et al., 1999; Jones, 2010;
Martin, 2007; Rae & Subramaniam, 2008; Ramos, 2003;
Srivastava et al., 2007, 2009). Ultimately, it seems that
the triangle is often employed as a mechanism to catego-
rize the information traditionally analyzed by auditors
along three large blocks.
Surprisingly, many articles draw on the fraud triangle,
but neglect some of its dimensions. This neglect is some-
times justi?ed through the explanation that one or another
of the dimensions is easier to control (Buckhoff, 2001; Jans,
Lybaert, & Vanhoof, 2010) or that the three branches of the
triangle are correlated with each other (Albrecht et al.,
2010, p. 264).
23
A number of researchers focus on the least
original dimension of the model (at least according to Cres-
sey) – that of opportunity and, as a result, the discussion
centers on the theme of internal control:
In the author’s experience as a fraud investigator, where
there is opportunity we usually ?nd fraud. (Buckhoff,
2001, p. 73)
Everyone experiences pressures, and everyone ratio-
nalizes. Thus, everyone is a walking-around two-
thirds fraud triangle. [. . .] The simplest way to abolish
fraud, then, is to eliminate opportunity. (Messina,
1997, p. 37)
The importance of opportunity is stressed by Cressey’s
fraud triangle [. . .] with opportunity being the only
element of fraud risk that an employer can in?uence.
Two other elements that raise fraud risk, rationaliza-
tion and incentive, are personal characteristics.
Because a business has little if any control over these
elements, they are not considered in this study. (Jans
et al., 2010, pp. 19-20)
Again, it is assumed: a) that fraudis committedbyindivid-
uals lacking inmorality; andb) that the organization’s dutyis
to establish credible layers of control to ensure that moral
deviancies do not happen or, at least, are detected in a timely
manner. Other authors view the triangle as interesting, but
limited and needing to be enhanced. Wolfe and Hermanson
(2004), for example, propose adding a fourth dimension –
the capability to commit fraud – to make a ‘‘fraud diamond’’
(see also Dorminey, Fleming, Kranacher, & Riley, 2010;
McKnight et al., 2008).
24
Others prefer to combine the
triangle with a theory, such as attribution theory (Wilks &
Zimbelman, 2004) or ‘‘routine activity theory’’ (Ramamoorti,
2008), inresponsetothe perceivedlimitations of the fraudtri-
angle model. Most often, these authors contend that the main
dimension concerns internal control procedures.
In sum, our analysis brings to the fore the complexity of
the chains of translations that have developed following
the fraud triangle’s conceptualization. A number of aca-
demics and practitioners have been working to de?ne the
explanatory potential of the model, to improve it, or to of-
fer instruction in its practical use. On this basis, it can be
argued that the triangle lays the groundwork for a paradig-
matic range of enigmas, in the sense attributed to Kuhn
(1970), where the members of a community, who share
23
The claim of correlation moves us even further away from Cressey’s
work. On the contrary, Cressey sought to demonstrate that each dimension
is insuf?cient by itself and that acts of fraud are only committed when all
three dimensions are present.
24
In fact, this dimension is present in Cressey’s de?nition of opportunity.
In it, he includes the skills that a person would need to violate trust
(Cressey, 1953, p. 29). However, this fourth dimension is consistent with a
view whereby opportunity is not linked to a position of trust but to the
ability to evade internal control procedures.
184 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
certain values (in this case, an interest in the triangle), seek
to better de?ne its nature and improve its predictive po-
tential. As long as the paradigmatic foundations of the tri-
angle are not called into question, there is a suf?ciently
credible knowledge base available that can be used to
legitimately intervene in the ?eld and experiment in trying
to re?ne the triangle’s knowledge extensions. Indeed, all
these uses of the fraud triangle, as well as the proposed
improvements, seem to associate the appearance of acts
of fraud with weaknesses in organizational surveillance
practices, thereby providing a point of support to secure
the jurisdictional legitimacy of those able to apply hybrid
criminological-accounting knowledge.
One central prescriptive point ensuing from this body of
knowledge is that organizational controls must be system-
atically applied as a result of suspicion towards individual
morality. In other words, the fraud triangle has been har-
nessed as a tool, in the service of practitioners and theo-
rists, to promote a branch of knowledge that views fraud
at the juncture of an individual and organizational
problem.
Demonizing the ethical abnormalities of speci?c individuals
While the vast majority of the articles we inventoried
focus on questions of internal control, a number of them
deal with the other dimensions of the triangle, which are
usually mentioned to enumerate a few characteristics that
are depicted as being speci?c to fraudsters. Apparently,
this not only helps in the identi?cation of fraud, but, more
importantly, facilitates prevention by means of spotting
potential fraudsters. Most of these characteristics are
behavioral and relate to the fraudsters’ psychology. For
instance,
Not surprisingly, all three elements of the fraud triangle
are in?uenced by the fraud perpetrators’ psychology.
After all, personal incentives and perceived pressure
drive human behavior, and the need to rationalize
wrongdoing as being somehow defensible is very much
psychologically rooted in the notion of cognitive disso-
nance. To some extent, even the assessment of opportu-
nity—including the relatively low likelihood of being
caught—depends on the perpetrator’s personal, behav-
ioral calculus. (Ramamoorti, 2008, p. 525)
Echoing the type of concerns expressed originally
through the ACFE, several scholars maintain that a recur-
ring motive for committing fraud stems from ?nancial dif-
?culties brought on by an inappropriate lifestyle.
According to these authors, fraudsters are often people
with a ‘‘gambling problem’’ who want to ‘‘enjoy a comfort-
able lifestyle’’ (Albrecht et al., 2010; Alleyne & Howard,
2005; Buckhoff, 2001; Durbin, 2006; Grossman, 2003; Hil-
lison et al., 1999; Howe & Malgwi, 2006; Kelly & Hartley,
2010; McKnight et al., 2008; Murdock, 2008; Peterson &
Gibson, 2003; Ravisankar et al., 2011). The emphasis on
employee lifestyle is particularly alluring to those actors
who endeavor to spot potential fraudsters, because these
behavioral characteristics can be observed as long as one
possesses the necessary know-how (Wells, 1993, pp. 93–
94). It is also very consistent with a moral view that frowns
on gambling and the desire to live beyond one’s means.
Accordingly, in the eyes of these authors, fraud is often
committed by people af?icted with a de?cient morality,
who do not conform to the authors’ lifestyle ideal – that
of a hard-working, frugal individual who is always ready
to report any deviation from the norm that may occur in
her/his circle:
Individuals who are honest always do the right thing
and represent the lowest fraud risk. When an unex-
pected ?nancial need arises, they work overtime, hold
multiple jobs, reduce their expenses, and seek help
from friends and family. They are driven by high moral
values and address setbacks as challenges to overcome.
When honest individuals identify control weaknesses,
they tend to notify their managers, become whistle-
blowers by calling the ethics hotline, or con?de in an
internal auditor, compliance of?cer, ombudsperson, or
legal counsel. (Murdock, 2008, p. 83)
The above quote illustrates the moralizing, black-and-
white view that underlies certain discourses on fraud. In
fact, many authors assert that fraud is linked to de?cient
ethics on the part of the fraudster.
25
They draw a distinction
between ‘‘normal’’ and ‘‘pathological’’ and describe the psy-
chological traits that they consider typical of fraudsters. One
of the main limitations to this research lies in identifying
psychological traits that some fraudsters possess without
testing whether they are generalized and without verifying
that these traits appear more often than in the general
population.
26
Apart from weaknesses in internal control, the main
cause of fraud mentioned by the authors, therefore, relates
to de?ciencies in the morality of individuals (Albrecht
et al., 2010; Cohen et al., 2010; Grossman, 2003; Hillison
et al., 1999; Holton, 2009; Jones, 2010; Kidder, 2005; Mar-
tin, 2007; Murdock, 2008). Quite simply, Cohen et al.
(2010) explain fraud by a lack of ethics among managers.
In the words of Dorminey et al. (2010, p. 20), ‘‘violations
of ethics, trust, and responsibility are at the heart of fraud-
ulent activities.’’ Auditors are then urged to assess the
morality of individuals:
Our article suggests that regulators should place greater
consideration on ethics in the of?cially promulgated
auditing standards in order to enhance the ability of
auditors to be more effective in detecting corporate
fraud. (Cohen et al., 2010, p. 272)
Auditors need to consider an important aspect of people
who commit fraud: their character. Individuals bring to
organizations elements of their upbringing, culture, and
ethical and moral beliefs. These three elements are the
foundation of people’s attitudes and the key ingredients
determining their character. The elements are placed
25
This is particularly apparent in the operationalizations of ‘‘rationaliza-
tion’’ (see especially Howe & Malgwi, 2006, pp. 28–29). This is taken to
extremes when the authors use this variable to link fraud to certain
national stereotypes which are discreetly concealed under the term
‘‘cultural rationalizations’’ (Albrecht et al., 2010, pp. 263–265).
26
From a critical angle, it is the entire set of assumptions underlying the
descriptions of ‘‘typical fraudsters’’ that is revealing – not of the fraudsters’
pro?le, but of the fraud theorists’ beliefs.
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 185
along a moral continuum that classi?es people as hon-
est, situational/potential, or dishonest. (Murdock,
2008, p. 82)
[Auditors] need to understand, assess, and respond to
the ethics of prospective and current clients. (Martin,
2007, p. 5)
Fraud is sometimes associated with a neurotic person-
ality, that of the pathological fraudster or predator (Dormi-
ney et al., 2010), the higher Machiavellian (Murphy, 2012),
the industrial psychopath (Ramamoorti, 2008) involved in
vice-related activities (Hillison et al., 1999, p. 353) or the
pathological gambler (Kelly & Hartley, 2010). This associa-
tion is justi?ed theoretically using Cressey’s work, but by
replacing the concept of rationalization with that of dis-
honesty or by associating it with a lack of integrity or per-
sonal ethics (Albrecht et al., 2004; Buckhoff, 2001;
Loebbecke, Eining, & Willingham, 1989; Rae & Subraman-
iam, 2008; Srivastava et al., 2007; Srivastava et al., 2009).
This permutation, which is present in SAS 99 (AICPA,
2002; Ramos, 2003) and ISA 240 (IFAC, 2006), seems to as-
sume that individuals with dubious ethics are more likely
to rationalize a fraudulent act, which is however not con-
sistent with Cressey’s argument. In sum, the above scholars
emphasize the morality of organization members and as-
sume that it is possible and necessary to distinguish indi-
viduals with acceptable and strong morals from those
lacking in personal ethics.
27
To conclude, one could argue that the a priori identi?ca-
tion of psychological traits as likely to lead to dishonest
acts seems to have more to do with prejudice than rea-
soned observation. Accordingly, the disapproval of trans-
gressive behaviors and the association of these behaviors
with risky personalities or characters, as found in the
mainstreamliterature on the fraud triangle, are legitimized
by the choice of examples that are suf?ciently egregious as
to be condemned almost unanimously. Very few authors,
following Sutherland (1983) for example, adopt a more
sociological view of fraud. Of the articles in our dataset,
only Donegan and Ganon (2008) and Free, Macintosh,
and Stein (2007) consider acts of fraud to be caused by
societal pressures and contexts which favor the emergence
of particular cultures.
Promoting suspicion
Most articles we inventoried use the fraud triangle to
justify an association between the problem of fraud and
an array of organizational solutions (‘‘better’’ internal con-
trol), thereby promoting the intervention of auditors (and,
to some extent, that of fraud examiners) in the domain of
fraud prevention and detection. This professional claim is
supported with ambiguous rhetoric, which can be quite
effective in securing professional work (Alvesson, 1993).
The rhetoric follows a two-part argument. First, the risk
of fraud is high because fraud is widespread and its conse-
quences are particularly serious. Second, auditors’ compe-
tencies are most useful in combating fraud within
organizations, because internal control is the most man-
ageable dimension of the fraud triangle.
28
In particular, this
professional rhetoric is predicated on the presence of a siz-
able risk. Many articles begin with a reminder of the ?gures
published by the ACFE that tend to present fraud as frequent
and widespread (Aguilera & Vadera, 2008; Albrecht et al.,
2004; Conley, 2000; Murdock, 2008; Murphy, 2012; Peter-
son & Zikmund, 2004; Srivastava et al., 2009). These ?gures,
based on CFEs’ ‘‘educated guesses’’ (Wells, 1997, p. 34), are
presented in ways that convey a sense of magnitude and ur-
gency to react:
Survey participants estimated that the typical organiza-
tion loses 5% of its annual revenue to fraud. Applied to
the estimated 2009 Gross World Product, this ?gure
translates to a potential total fraud loss of more than
$2.9 trillion (ACFE, 2010).
29
On this basis, the intervention of auditors and fraud
examiners would seem to be both necessary (the risk must
be addressed) and cost-effective (the fees may be high, but
they are negligible as compared to the cost of certain fraud
cases). This conclusion is particularly visible in the case
studies used to teach the assessment of fraud risk and
the fraud triangle conceptualization to undergraduate stu-
dents. The vast majority of these case studies frame their
questions along a relatively traditional evaluation of inter-
nal control systems (Brucker & Rebele, 2010; Clayton &
Ellison, 2011; Fleak et al., 2010; Howe & Malgwi, 2006;
Michelman et al., 2011; Peterson & Gibson, 2003). The nar-
ratives found in these cases provide important clues to the
assumptions made by the authors. For example, they often
portray a person who seems to be ‘‘completely normal’’
and above suspicion until repeated acts of fraud are discov-
ered (Clayton & Ellison, 2011; McKnight et al., 2008; Mich-
elman et al., 2011; Peterson & Gibson, 2003). It is only
when the person is caught that some suspicious behavior
is discovered (a gambling habit, an excessive appetite for
expensive clothes and luxury cars, etc.). This narrative,
whose purpose is to make a case for increased organiza-
tional controls (and which is also the opportunity to show
students why organizations should hire auditors and CFEs;
see for example Clayton & Ellison, 2011), implies that any
apparently ‘‘ordinary’’ individual can commit fraud.
30
The
feeling of widespread suspicion that these writings encour-
age is reinforced by the organizations they describe: a small
charitable organization (Fleak et al., 2010), a regional high
school (Howe & Malgwi, 2006), a municipal facility for
sporting events and concerts (Brucker & Rebele, 2010), a
27
Scott and Jehn (2003) nuance this point by showing that evaluating a
dishonest act can be tricky.
28
While the vast majority of articles employ this argument, some of them
also recommend the intervention of fraud examiners. In general, the
articles emphasize the competencies coming from the hybrid ?eld of
knowledge created at the intersection of accounting and fraud examination
and tend to promote the interests of the AICPA and the ACFE.
29
The ACFE publishes similar estimates every two years in its Report to
the nation(s). The participants to the 2002 and 2004 reports estimated that
the typical organization loses 6% of its annual revenue to fraud, a number
that reached 7% in 2008 but was lowered to 5% in 2006, 2010 and 2012. We
are grateful to an anonymous reviewer for signalling this point to us.
30
For instance, some cases depict fraudsters in ways that inspire
trustworthiness, being devoted to their job and family (McKnight et al.,
2008), or being married and generous (Michelman et al., 2011).
186 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
toy manufacturer (Clayton & Ellison, 2011), and a university
health center (Peterson & Gibson, 2003) – even organiza-
tions working for the public good are at risk of having their
resources misappropriated.
This professional rhetoric must nevertheless overcome a
contradiction: fraudis presentedas being linkedto the char-
acter of the perpetrators, but at the same time it is said to be
very widespread. This contradiction is resolved through the
notionof ‘‘risk’’: althoughhonest people present a lower risk
than dishonest ones, the risk is never zero, so control must
be systematic (Power, 2013). Even honest people can turn
into pathological fraudsters. As Peterson and Gibson
(2003, p. 70) explain, for example, once an individual has
started to steal without getting caught, ‘‘the temptation to
continue [is] too great.’’ Grossman (2003, p. 42) also states
that ‘‘Roughly 95 percent of the population is capable of
embezzlement under certain circumstances.’’ This type of
assertion promotes a climate of suspicion in which people
approach social relationships from the viewpoint that oth-
ers should not be presumed to be trustworthy:
Internal auditors, however, should assume that anyone
is capable of justifying the commission of fraud. Inter-
nal auditors should exercise ‘‘professional skepticism’’
particularly since fraud is typically committed by
‘‘those we trust.’’ (Hillison et al., 1999, p. 354)
Financial institutions should perform background
checks on every employee hired or promoted into sen-
sitive positions within the ?nancial institution. Such
checks should cover an individual’s criminal history,
education, previous employment and credit history.
(Durbin, 2006, p. 45)
Durbin (2006, p. 46) concludes her article with the fol-
lowing injunction: ‘‘Trust but verify.’’ This ambiguous pre-
scription is commonly made in the literature, which speaks
of trusting others while urging authorities to multiply their
veri?cation and control systems, therefore demonstrating
a lack of trust or even an exhortation to distrust. Cressey
criticized this contradictory injunction back in 1973 (when
his book was being republished), when he speci?cally ad-
dressed accountants and auditors, saying that replacing
trust with veri?cation was not a viable path (see above).
In several cases, the climate of widespread suspicion is
promoted by amplifying the gravity of the violations com-
mitted. Under the same conceptualization, the authors
lump together different behaviors that have very different
consequences. In studying the impact of deviancy on orga-
nizational performance, Dunlop and Lee (2004) considered
behaviors such as deliberately working slower than possi-
ble, arriving late for work (without permission) and mak-
ing fun of someone at work (p. 72). Without questioning
the unpleasant effects of these behaviors on immediate
colleagues, nor that working slower than stipulated in
the procedures can diminish the performance of a fast-food
outlet, one may wonder what the authors sought to estab-
lish by comparing these behaviors to larceny or sabotage.
In the same vein, Kidder (2005) studied employee miscon-
duct, lumping together longer work breaks and homicide
(pp. 389–390). Other authors postulate that deceptive
behavior in one situation is an indicator of the fraudster’s
moral strength in general: ‘‘an executive who cheats in golf
will cheat in business’’ (Wolfe & Hermanson, 2004, p. 42);
students who cheat will tend to commit fraud in their ca-
reer (Choo & Tan, 2008). Further, by failing to report a stu-
dent who does not contribute enough to group
assignments, one runs the risk of making a fraudster out
of him/her (McKnight et al., 2008).
31
These associations, all grounded in the same theoretical
template – the fraud triangle – tend to build equivalences
between serious frauds (therefore making it harder to chal-
lenge the legitimacy of the ?ght against fraud) and more
trivial cases (therefore generating the feeling that fraud is
widespread). One consequence of this is to favor an idea
of suspicion towards one another. We do not argue that
this climate of suspicion is an empirically valid description
of organizational life or that all studies of frauds explicitly
promote suspicion. The ‘‘climate of suspicion’’ emerged, in
the course of our analysis, from a stream of literature that
tends to con?ate all kinds of fraud with most serious of-
fenses and encourages organizations to take signi?cant ac-
tion in order to ‘‘tackle fraud.’’
Rendering organizations responsible
In addition to setting up a systematic internal control
and surveillance system, the authors of these papers put
forward various solutions (for preventing and averting
fraud risks) to be implemented within the organization;
the latter is conceived of as a chief intervention arena for
controlling fraud risk. Referring to surveys published by
the ACFE, several authors maintained that frauds are most
often detected thanks to employee ‘‘tips.’’ As a result, they
propose mechanisms, such as fraud tip hotlines to encour-
age people to report fraud (Dorminey et al., 2010; Gross-
man, 2003; Martin, 2007; Peterson & Gibson, 2003;
Peterson & Zikmund, 2004).
32
Others recommend, in addi-
tion to carrying out audits, hiring dedicated experts in fraud
protection; these authors are not averse to promoting the
ACFE in the process (e.g., AICPA, 2002; Clayton & Ellison,
2011; Grossman, 2003; Hillison et al., 1999). Several authors
believe that fraudsters are emboldened to persist in their
behavior if they receive only light punishments, so they rec-
ommend taking strong action against any cases of fraud de-
tected (Dorminey et al., 2010; Durbin, 2006; Hillison et al.,
1999; Martin, 2007; Murdock, 2008). For example, according
to Ramamoorti (2008, p. 524), ‘‘the rate and incidence of
crime varies inversely with the intensity and severity of rule
enforcement.’’
33
Grossman (2003, p. 44) advises people to
‘‘report incidents of embezzlement to the FBI, [their] local
district attorney or the police.’’
31
This last example is a case study which describes a mother who, in
addition to her job, goes back to school.
32
Belief in the whistleblower system is so strong that, although they
describe a case where the accused was considered by everyone to be above
suspicion and they provide numerous quotations from colleagues who are
incredulous that she could have committed a dishonest act, Peterson and
Gibson (2003) feel that the fraud could have been detected thanks to ‘‘tips’’
and ‘‘complaints’’ made by colleagues (p. 71).
33
However, a fair number of academics in criminology doubt the validity
of the relationship between crime rates and punishment – as demonstrated
by comparative crime statistics between the USA and Canada (Statistics
Canada, 2001), with the death penalty being only practiced in the USA.
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 187
Since these authors almost invariably associate fraud
with ethics, one of their key issues is to foster a good eth-
ical climate within the organization, for example by intro-
ducing a ‘‘code of ethics’’ (Dorminey et al., 2010; Durbin,
2006; Hillison et al., 1999; Martin, 2007), hiring only peo-
ple of integrity (Durbin, 2006; Grossman, 2003; Murdock,
2008) and increasing the number of opportunities for com-
munication and training on the organization’s ‘‘ethical val-
ues’’ (Dorminey et al., 2010; Hillison et al., 1999; Howe &
Malgwi, 2006; Martin, 2007; Murdock, 2008; Ravisankar
et al., 2011). It is, therefore, important to create an ‘‘ethical
culture’’ (Durbin, 2006), an ‘‘ethical infrastructure’’ (Mar-
tin, 2007) or a ‘‘workplace of integrity’’ (Dorminey et al.,
2010). Although these recommendations may seem reas-
suring, a few unorthodox authors criticize them:
High-sounding codes of ethics may make for good pub-
lic relations, but by themselves they are unlikely to
have any effect on the ‘‘ethical climate’’ of the govern-
ment or the business world. (Coleman, 1985, p. 241)
While Enron’s demise has been portrayed as resulting
from a few unscrupulous rogues or ‘‘bad apples’’ (the
phrase used by President Bush) acting in the absence
of formal management controls, Enron featured all of
the trappings of proper management control, including
a formal code of ethics, an elaborate performance
review and bonus regime, a Risk Assessment and Con-
trol group (RAC), a Big-5 auditor, and conventional
powers of boards and related committees. This control
infrastructure was widely lauded right up until the
demise of the company. (Free et al., 2007, p. 4)
Overall, to address the problem of fraud at the ethics le-
vel, the documents we examined make two principal rec-
ommendations. First, management shall strive to create a
sound ethical climate throughout the organization; second,
management shall set the example by committing itself, in
theory and in action, to stringent ethics principles. How-
ever, it seems to us that management’s ability to in?uence
ethical culture within the organization is not that obvious,
especially in light of the way in which the ‘‘risky’’ individ-
ual is constructed in the fraud triangle literature. To what
extent is management able to in?uence the ethical values
of pathological predators or industrial psychopaths? Yet,
apart from a few dissidents, such limitations do not tend
to be voiced when the triangle is articulated from an orga-
nization ethics perspective.
In sum, through the downstream literature we studied,
the organization is given a chief role in fraud intervention,
making it responsible, and, in turn, accountable for the
concretization of fraud risk. That is, as a result of the trian-
gle’s web of translations, fraud can be ‘‘explained’’ through
lapses in individual morality that have not been properly
reined in by the organization – in other words through
lapses in organization vigilance.
Extending the network through the risk management
literature
Our analyses thus far examined mainly downstream
rami?cations of the fraud triangle in academic or hybrid
journals. Although we brie?y examined how the fraud
triangle in?uenced certain auditing standards, we deemed
it relevant to investigate the practitioner literature more
extensively – speci?cally on the topic of risk management.
Risk management now constitutes a thriving discipline
(Arena, Arnaboldi, & Azzone, 2010), exerting signi?cant
in?uence on ways of thinking and doing in numerous areas
(Power, 2007). Clearly, risk management is one of today’s
most signi?cant sense-making referents that actors use in
the ?eld to develop understandings of action and inaction
surrounding private and public sector organizations. By
extending our analysis to the risk management literature,
we were able to better examine how the fraud triangle
and its rami?cations are viewed and thought of in the prac-
titioner community.
Overall, risk management literature conveys a picture
relatively consistent with a vision of fraud at the con?u-
ence of individual morality and organization control. Some
documents explicitly conceptualize fraud as a problem of
individual morality. For instance: ‘‘Fraud essentially in-
volves using deception to dishonestly make a personal gain
for oneself and/or create a loss for another’’ (CIMA, 2008, p.
7). However, morality and subjectivity are less in?uential
than in other streams of literature positioned within the
fraud triangle discourse. By contrast, the individualizing
trend is palpable in statements that downplay other
perspectives:
While fraud can, from a legal perspective, be perpe-
trated by a company, the steps taken to commit fraud
are always the actions of individuals. (PwC, 2009, p. 4)
References to the ACFE are found when the notion of
fraud is articulated as deceptive and dishonest acts com-
mitted by speci?c individuals or entities:
It’s worth reviewing what fraud is, why it happens and
how it manifests itself in corporations. According to the
Association of Certi?ed Fraud Examiners (ACFE), fraud
is ‘‘deception or misrepresentation that an individual
or entity makes knowing that the misrepresentation
could result in some unauthorized bene?t to the indi-
vidual or to the entity or some other party.’’ (Ernst &
Young, 2009, p. 1)
One of the key themes is that fraud risk always looms in
the background of organizational life, as indicated below
where CIMA mentions the inevitability of fraud:
Fraud is always a possibility. A healthy amount of pro-
fessional scepticism should be maintained when con-
sidering the potential for fraud. This does not mean
that every time someone seems to be working excessive
overtime, without taking leave, they are in the process
of committing a fraud, or that inaccuracies in the
accounts are there to cover up a fraud. Nevertheless,
they might. (CIMA, 2008, p. 41)
The fraud triangle therefore appears in these docu-
ments in ways that suggest that it is, to a large extent,
institutionalized within the risk management literature.
The following excerpt does not directly refer to the trian-
gle, but presents its three dimensions as a matter of fact,
as if they can be effectively used to make sense of fraud
and intervene meaningfully: ‘‘An effective fraud risk
188 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
identi?cation process includes an assessment of the incen-
tives, pressures, and opportunities to commit fraud’’ (IIA,
AICPA, & ACFE, 2008, p. 8).
34
Other documents explicitly
highlight the triangle and its dimensions. One illustration
(see Fig. 1) juxtaposes the triangle with a road sign, suggest-
ing the imperativeness of addressing fraud risk through the
triangle’s template.
Fig. 1 pictorially presumes that fraud risk results from
the in?uence of the triangle’s dimensions. Other docu-
ments rely on a rhetoric that tends to naturalize the three
dimensions, as if they accurately re?ect the essence of
fraud in the real world. For example,
In terms of opportunity, fraud is more likely in compa-
nies where there is a weak internal control system, poor
security over company property, little fear of exposure
and likelihood of detection, or unclear policies with
regard to acceptable behaviour. Research has shown
that some employees are totally honest, some are
totally dishonest, but that many are swayed by oppor-
tunity. (CIMA, 2008, p. 13)
In general, we found that the authors’ writing styles re-
?ect con?dence in discussing what fraud is and how it can
be controlled. Probabilistic claims relating to people’s atti-
tudinal morality and its potential disruptors are sustained
through the persuasiveness ensuing from ‘‘research’’
endeavors. The following excerpt establishes a signi?cant
linkage between the triangle’s dimensions and reality:
One of the most effective ways to tackle the problem of
fraud is to adopt methods that will decrease motive or
opportunity, or preferably both Rationalisation is per-
sonal to the individual and more dif?cult to combat,
although ensuring that the company has a strong ethi-
cal culture and clear values should help. (CIMA, 2008,
p. 14)
Therefore, the triangle emphasizes a number of target
points that should be privileged in matters of fraud inter-
vention, one of them being to ensure that the organiza-
tion’s culture is ethically ‘‘strong’’ and not conducive to
lapses in individual morality. Interestingly, one of the doc-
uments, in developing some criticisms of the fraud trian-
gle, points to the ?eld of behavioral research to overcome
the triangle’s limitations:
The fraud triangle provides a simple model of three fac-
tors that contribute to fraud: pressure, opportunity, and
rationalization. However, the fraud triangle does not
explain one critical phenomenon: why one person takes
actions to distort ?nancial results, while another in a
similar situation does not. Management, boards and
audit committees, and internal and external auditors
could bene?t from tools and resources that help opera-
tionalize the vast amount of behavioral research on the
factors that move an individual past the temptation or
opportunity to commit fraud. (CAQ, 2010, p. 31)
Thus, even when criticizing the fraud triangle, the ?rst
reaction is to look for behavioral lines of explanation, in
accordance with a deep-level tendency to individualize
fraud. Another key emphasis found in the documents stres-
ses the organization’s responsibility in reining in individu-
als’ deviancies. The following excerpt essentially maintains
that the organization’s responsibility to control fraud en-
sues fromsigni?cant pressures in the environment. As a re-
sult, an organization that fails to establish an appropriate
control structure will be viewed as poorly governed and
unvigilant:
Reactions to recent corporate scandals have led the
public and stakeholders to expect organizations to take
a ‘‘no fraud tolerance’’ attitude. Good governance prin-
ciples demand that an organization’s board of directors,
or equivalent oversight body, ensure overall high ethi-
cal behavior in the organization, regardless of its status
as public, private, government, or not-for-pro?t; its rel-
ative size; or its industry. The board’s role is critically
important because historically most major frauds are
perpetrated by senior management in collusion with
other employees. Vigilant handling of fraud cases
within an organization sends clear signals to the public,
stakeholders, and regulators about the board and man-
agement’s attitude toward fraud risks and about the
organization’s fraud risk tolerance. (IIA et al., 2008, p. 5)
In the same vein, PwC (2009, p. 14) maintains that
‘‘enlightened’’ organizations are actively involved in ?ght-
ing fraud; a logical implication is that organizations that
fail in this ?ght are not ‘‘enlightened’’ and may be viewed
as such, thereby threatening their legitimacy:
One hears commentators on fraud describing how a
particular solution is key to the management of fraud
risk – ‘‘risk identi?cation’’, ‘‘the tone at the top’’ or ‘‘bet-
ter use of technology’’ are just a few of the many keys
that seem to be available. In our experience the enlight-
ened organisation evaluates the options available to
reduce fraud losses within a comprehensive framework
of the kind we show below.
Fig. 1. Relating the fraud triangle to fraud risk.
34
Also, the 2012 Exposure Draft of COSO’s Internal control – Integrated
framework now explicitly includes a principle requiring companies to
consider the potential for fraud in assessing the risks they face (COSO, 2012,
p. 78). Three main ‘‘points of focus’’ (out of four) that allegedly may assist
management in this endeavor relate to the three legs of the triangle:
‘‘assesses incentive and pressures’’; ‘‘assesses opportunities’’; and ‘‘assesses
attitudes and rationalizations.’’
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 189
One key mechanism on which the ‘‘enlightened’’ orga-
nization should focus its energy is the establishment of a
proper ‘‘tone at the top’’ which, if appropriately communi-
cated through all hierarchical ranks, can translate into an
organizational culture conducive to ethical behavior. The
CAQ (2010, p. 10) provides detailed observations on the
matter, articulating a linkage between tone at the top,
organizational culture, and success in terms of fraud pre-
vention and detection:
Corporate culture in?uences all three sides of the fraud
triangle. A strong ethical culture creates an expectation
of doing the right thing and counteracts pressures to
push the envelope to meet short-term goals. Likewise,
an ethical culture typically supports well-designed
and effective controls that diminish opportunities for
fraud and increase the likelihood that fraud will be
detected quickly. A culture of honesty and integrity
can severely limit an individual’s ability to rationalize
fraudulent actions. [. . .] Of all the groups with a role
in the ?nancial reporting supply chain, management
has the most critical role, because it is responsible for
setting the tone at the top and establishing the culture
and designing the systems that drive the organization.
In the opinion of CAQ discussion participants, compa-
nies successful in building an ethical culture that deters
fraud do so through a dual approach. First, they clearly
state their ethical standards, and second, senior man-
agement visibly lives by those standards every day
and reinforces them through the entire organization
with appropriate systems and processes.
Grounding the argument in the realm of practice expe-
riences, the text does not leave any doubt; the organization
has a signi?cant degree of power over cultures that devel-
op from within. Further, this conveniently provides an an-
gle for criticism in case a fraud situation takes place within
the organization: fraud results from organizations that did
not establish a proper culture.
In summary, our analysis of the risk management liter-
ature indicates that fraud is articulated in it, especially
through the fraud triangle concept and its underlying
dimensions. These articulations are characterized with a
template that individualizes fraud while presenting a
range of mechanisms that can or should be used by the
organization to control risks ensuing from individuals’
deviancies. The individualizing trend is reinforced
throughout the process; fraud is explained by actions per-
petrated by deviant individuals and by organizations that
were neglectful in establishing a proper web of control
around fraud risk. As a result, social and historical lines
of interpretations are marginalized. From a broader angle,
the dual focus on individual morality and organizational
responsibility underlies most of the professional, educa-
tional, and applied-research literature produced around
the fraud triangle concept.
Discussion
We studied a particular metaphorical knowledge claim
that is advanced to make sense of and intervene in matters
of organizational fraud – the fraud triangle. Our analysis
focused on the chain of translations surrounding the trian-
gle, examining some of its antecedents, its initial formula-
tion in the emerging fraud examination community, and
how it extended its in?uence beyond that community
while being reinterpreted in diverse ways. Apart from a
few discordant voices, the translations we uncovered con-
verge on a vision of fraud being caused by morally deviant
individuals whose behavior needs to be reined in by the
organization.
Our ?ndings indicate that the fraud triangle constituted
an appealing knowledge base, engendering a plethora of
additional translations or imaginings to gain a better intel-
lectual and professional grip on a fundamentally elusive
and complex phenomenon. At the heart of the chain of
translations is Cressey’s work, which is represented as a
reliable and generalizable theoretical anchor. This sustains
the impression that fraud examination is built on a ?eld of
scienti?c knowledge predicated on academic research,
thereby conferring a certain authority to the discipline.
Numerous examples, backed with ‘‘concrete’’ cases and
quanti?ed data, are prominently featured to illustrate this
?eld of knowledge’s relevance and utility. Yet, the transla-
tion trajectories that followed the ‘‘importation’’ of Cres-
sey’s ?nal hypothesis in the fraud examination and
surrounding communities have reframed it according to a
speci?c conception of fraud and fraudsters. What appears
as a technical and neutral device, that is to say the fraud
triangle, actually promotes a vision of fraud anchored in
both the individual and organization, while downplaying
the social, political and cultural explanations for fraud. At
the end of the day, we are confronted with a series of rep-
resentations, which lie at the heart of the professional
work of a range of actors in the economy, that lead us to
view fraud through the lens of individual transgressions
being perpetrated while leaving the systemic and socio-
political aspects of fraud unchallenged. This analytical
point is valid whether the designated fraudster is a low-
er-ranking employee or top executive; putting the blame
on a speci?c individual whose lack of morality is ‘‘obvious’’,
ultimately prevents the system from being seriously ques-
tioned (Guénin-Paracini, Gendron, & Morales,
forthcoming).
We have shown that the vast majority of articles we
inventoried presents frauds carried out by individuals act-
ing alone. Other scholars – who most certainly do not sub-
scribe to mainstream thinking in accounting-criminology –
consider frauds to be less the result of individual deviance
than the outcome of societal pressure and historical con-
tingencies (Braithwaite, 1985; Coleman, 1985; Donegan &
Ganon, 2008; Free et al., 2007; Mitchell, Sikka, & Willmott,
1998; Poveda, 1994; Stuebs & Wilkinson, 2010). As Cole-
man (1985, pp. 15-16) explains:
The media’s tendency to personalize crime stories and
seek out an individual villain as a target of public out-
rage ignores the structural forces that lie at the roots
of the problem. In fact, many organizational crimes can-
not be attributed to any single individual, but only to
the kind of impersonal social forces that the media all
but ignore.
190 J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194
Coleman (1985, p. 53) considers the main factor of fraud
to be found in ‘‘the competitive spirit so central to the cap-
italist economic system.’’ He also mentions modern indus-
trial society, built on a desire for wealth and success, which
produces a combination of social inequality and mobility
that naturally fosters a desire to succeed at any cost and
is rationalized by a business culture (often reinforced by
a convergent organizational ethos) whose ‘‘business is
business’’ ethics seems to justify the means employed to
achieve the goal of commercial and ?nancial success (Cole-
man, 1985, pp. 207–210; p. 240). However, this view is lar-
gely incompatible with the individualizing and
organizationally-bounded conceptualization of the fraud
triangle. There may be one area of convergence, though,
that of ‘‘tone at the top’’ discussed as a way to establish
proper incentive and organizational climate. Free et al.
(2007) and Stuebs and Wilkinson (2010) are rare excep-
tions in the literature we studied, where commitment to
a socio-historical conceptualization of fraud is more
obvious.
The translation trajectories that we studied also relate
to a normative agenda. The fact that fraud is neither very
visible nor easily predictable arguably justi?es the involve-
ment of experts (read: certi?ed professionals). This endea-
vor is associated with the creation of a hybrid ?eld of
knowledge and intervention, built on the association be-
tween accounting and criminal investigation, which ulti-
mately targets the establishment of systems of
organizational surveillance predicated on the detection of
moral deviancy acts. While the ACFE’s role in disseminat-
ing this vision of fraud in the business community and
abroad is prominent, the role of the accounting profession
should not be neglected (Power, 2013). Although auditors
have traditionally shown reluctance in accepting responsi-
bilities over matters of fraud prevention and detection
(Humphrey, Moizer, & Turley, 1992), today the accounting
establishment (i.e., auditing standard setters, professional
bodies and the Big Four) is actively involved in promoting
and diffusing the triangular representation of fraud. In the
process, the conception of fraud that led to the crafting of
the triangle, biased as it may be, remains unquestioned.
This conception is materialized in a series of represen-
tations that not only portray frauds as individual trans-
gressions but also associate fraudulent acts with certain
categories of people. As translated in the wake of the
development of the fraud examination discipline, the fraud
triangle often draws a distinction between normal and
abnormal, moral and immoral. Yet the question of values
is not raised, as if the distinction between good and evil
were shaped by universal positions that do not need to
be questioned or spelled out. The neglect of values is typi-
cally sustained by focusing on uncontroversial, manifestly
reprehensible cases – or at least ones that the authors dis-
approve of themselves – while drawing general conclu-
sions beyond the situations described, as if these cases
constitute a persuasive base to support a more universal
point. By and large, cases that present a potential for rais-
ing complicated questions or dilemmas are avoided. As a
result of all this, the question of values is not debated:
the process of forming a judgment is considered self-
evident.
Overall, our analysis reveals two main lines of reasoning
characterizing the way in which the fraud triangle is artic-
ulated. First, fraud often consists of individual morality
lapses for which organizations are held accountable. Sec-
ond, anyone may succumb to the temptations of immoral-
ity and commit a fraudulent act. Together, these two lines
of reasoning tend to blur the distinction between ‘‘danger-
ousness’’ and ‘‘risk.’’ Fraud examination largely produces
probabilistic numbers – searching for relations between
frequencies of abnormalities and the living conditions of
certain categories of subjects – in an attempt to develop
and promote ‘‘objective risk factors.’’ At ?rst sight, this ap-
pears to be consistent with Castel (1991) who refers to a
broader social tendency in which the individual and the
‘‘dangers’’ it represents tend to escape fromview while dis-
embodied statistical constructs or ‘‘risks’’ are given promi-
nence. If this is true, then the notion of risk, as conveyed
today in society, is increasingly divorced from that of dan-
ger, the latter being understood as an internal quality
immanent to the subject (Castel, 1991). However, our anal-
ysis indicates that fraud triangle articulations are not fully
consistent with Castel’s (1991) theorizing. Reintroducing
the notion of dangerousness as an immanent quality of
certain categories of individuals, yet associating it with a
claimed knowledge base predicated on ‘‘objective’’ risk fac-
tors, the fraud triangle literature promotes a climate of
suspicion in the business community both towards indi-
viduals in general and towards individuals ?tting some risk
pro?le in particular. The interesting point is not so much
whether this conception is empirically valid or not, but
its performative effect which is, ?rst, to propagate a way
of conceptualizing dysfunctions in the economic system
from a moralizing angle, second, to establish the need for
organizations to manage ethical risk and, third, to legiti-
mize the relevance of fraud examination expertise.
A key pattern in the literature we analyzed is deviance
not being related to complex social factors, but to failures
in individual morality and breakdowns in the organiza-
tion’s endeavors to control probity. As such, the fraud tri-
angle literature fosters a climate of suspicion against
individuals (employees, managers, board members) that
engenders a need for constant vigilance. It rests on the be-
lief that it is possible to detect wrongdoing, fraud, dishon-
esty and unethical behavior and to remedy (at least
partially) these acts of moral deviancy by implementing
an array of control mechanisms within the organization.
Further, deviance can occur anywhere; everyone must be
vigilant, watch out for their possessions and keep others
under surveillance. The goal is not to eradicate fraud
(which is viewed as an impossibility), but to implement a
range of organizational mechanisms and policies aimed
at restoring order, morality and security. Further, while
the mainstream discourse promoted through the fraud tri-
angle emphasizes an ‘‘obvious’’ need to identify and neu-
tralize fraud perpetrators, their rehabilitation is not
encouraged given that moral deviancies may be incurable.
At the end of the day, the vision that underlies both fraud
triangle technology and professional claims of fraud spe-
cialists implies a perpetual cat and mouse game, where
deeply-rooted socio-historical causes of fraud are relegated
to the background of the players’ re?ective gaze. Yet, this
J. Morales et al. / Accounting, Organizations and Society 39 (2014) 170–194 191
vision is not neutral. The fraud triangle rede?nes social,
political and economic relations through a normalizing dis-
course that celebrates the use of organizational surveil-
lance to control risk ensuing from individuals’ frail
morality. In so doing, individuals and their subjectivity
are constructed as vectors of riskiness that must be tightly
controlled by the organization.
Conclusion
Our broad purpose has been to explore how an appar-
ently descriptive but profoundly normative discourse on
organizational fraud has emerged around the ‘‘fraud trian-
gle’’ concept. Speci?cally, we followed the fraud triangle
genealogy and analyzed its underlying chains of transla-
tions and problematizations. Our analysis indicates that
fraud triangle articulations privilege individualistic expla-
nations of fraud to the detriment of sociological explana-
tions that highlight fraud’s sociopolitical nature and
locates its causes in institutional and historical arrange-
ments. Instead, the fraud triangle focuses attention on
the fragility of individual morality and establishes the
organization’s duties in controlling ‘‘risky individuals.’’
One of our main arguments is that the fraud triangle
constitutes a rhetorical tool that professional associations
have used to create and consolidate a ?eld of knowledge
and intervention around individual morality. Our analysis
brings to the fore translations representing the fraud trian-
gle as a credible technology that allows fraud specialists to
speak authoritatively and intervene, in certain ways, in
organizational fraud. In so doing, a certain discourse of
normality gains legitimacy through the recruitment of al-
lies around and fabrication of a concept that appears to
be technical and descriptive, but contains a very speci?c vi-
sion of fraud.
The feeling of neutrality is sustained by a series of illus-
trations focused on the least controversial examples. This
also serves to present fraud as ‘‘inherently’’ unacceptable.
Lumping these ‘‘serious acts’’ (e.g., bribery, misappropria-
tion of funds) with trivial deviances (e.g., arriving late at
work, taking long breaks) and more controversial actions
(e.g., working more slowly than asked by the hierarchy,
workplace resistance) then serves to justify considering
any ‘‘workplace deviant behavior’’ as a fraud that should
be systematically condemned, deterred and punished.
Fraud is constituted, therefore, as reprehensible and im-
moral, though relatively controllable when organizations
establish appropriate surveillance systems. The notion that
morality boundaries vary in time and space (Douglas,
1966) is ignored.
These ?ndings contribute to our understanding of the
links between fraud, organizational control and society.
Previous studies argued that today’s society is character-
ized by a proliferation of control and audit technologies
to restore trust – but that basically promote distrust
(Power, 1997). Our study can be viewed as an examination
of the problem of trustworthiness. We showed that a cli-
mate of suspicion is promoted in the fraud triangle litera-
ture and that the organization is deemed a legitimate site
for restoring trust through intervention. Our analysis also
indicates that technologies of organizational control and
surveillance are in?uenced by moral judgments about
what is normal and what is unacceptable deviance. Pro-
moted in the name of reason and economic commonsense,
the fraud triangle is a technology of fraud risk manage-
ment that simultaneously targets individual character
and organizational studiousness. The triangle sustains nor-
malizing patterns that aim to shape identities of risky indi-
viduals whose frail morality needs to be tightly controlled
and disciplined by the organization. In so doing, socio-his-
torical visions of fraud are marginalized and relegated to
the periphery of the ?eld.
Acknowledgements
We bene?ted from the comments by David Cooper, Sa-
jay Samuel, James Williams, André Spicer, four reviewers,
and workshop participants at HEC Montréal. We also
acknowledge the comments from participants at the
2013 Alternative Accounts Conference (Toronto), the
2013 Annual Congress of the European Accounting Associ-
ation (Paris) and the 2013 EGOS colloquium (Montréal). Of
course, the opinions expressed in the present manuscript
bind the authors only. The ?nancial support of the Social
Sciences and Humanities Research Council of Canada is
also gratefully acknowledged.
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