Assessment Two - Blog #1

Reflective Thinking Task – Blog #1

I disagree with the statement that Cressey’s fraud triangle is an outdated approach to understanding how and why people commit fraud, bribery and corruption because it does not address cyber-crime or how groups form to commit crime. 

Cyber-crime is merely a method of conducting fraud, the three elements of the fraud triangle are still relevant. The triangle approach can still be adapted to cover fraud that is perpetuated through cyber-crime and explain how criminal groups form to commit fraud. 

According to the fraud triangle the three necessary elements are:

-          Opportunity,

-          Rationalisation and,

-          Pressure.

In my experience working at a software company, certain employees within the IT department have the opportunity to commit computer (cyber) fraud because they access to confidential staff passwords (including top management) and the ability to change them.  However, no employee has committed fraud within the organisation, and nor are they likely too.

Employees working at this company are missing two essential elements from the fraud triangle, Rationalisation and Pressure.  It can been seen through my own personal experiences that each element to this triangle is crucial to the crime actually being committed.  The consequences of committing such a crime cannot be rationalised by a person who is experiencing no pressure or will not gain enough incentive.  

Rezaee and Riley state that corporate culture can foster the motivation, and create the opportunities, for employees and top management to commit fraud, bribery and corruption, (2010).  They also put fraud down to the lack of responsible corporate governance within organisations. I would suggest that organisations focus their attention on these aspects of business in an attempt to prevent fraud.

References

Rezaee, Z., Riley, R. (2010). Financial Statement Fraud: Prevention and Detection, Second Edition. Retrieved from http://library.books24x7.com.ezp01.library.qut.edu.au/toc.aspx?bookid=33786. 

Useful Link

Check out this TED-Ed video explaining the fraud triangle (this video also talks about Parmalat’s fraud scandal): https://youtu.be/Tb6QX9Yy1GM.