course

The Fraud Triangle

(100)
4.75
163 Enrolled
2 Hours (On-Demand)
2 CPE  

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The fraud triangle is often referred to when studying aspects of white collar crime and fraudulent acts. There are several types of fraud, yet they all share the same fraud triangle. Two individuals who deserve the most credit for the fraud triangle theory are early criminology researchers Edwin Sutherland and Donald Cressey. Sutherland and Cressey, both criminologists, were professors and researchers teaching criminology in sociology departments.  

Sutherland developed the "differential association theory” of why people commit crimes. He believed criminal behavior is learned and not inherited.

The person most associated with developing the fraud triangle was Donald Cressey.  Cressey was a co-author with and student of Edwin Sutherland.   He defined the fraud problem as a "violation of a position of financial trust that the person originally took in good faith.”

Although Cressey and Sutherland were linked to the concepts embedded in the fraud triangle, neither referred to the term “fraud triangle” or the visual depiction.

Understanding fraud and why it occurs requires a deep understanding of the philosophy and concepts behind each leg of the fraud triangle: pressure, opportunity and rationalization. Organizations can take real, visible action to reduce the risk of opportunity by implementing better internal controls and processes. Individuals' moral framework and corporate culture, included in realization and pressure, are far more difficult to affect explicitly and directly. By understanding these concepts and the profile of the typical white collar fraudster, individuals can begin taking proactive steps towards fraud mitigation.

Note: Information within this course comes from readily available public domain documents and is utilized by the trainer as a supplement for relaying the course content.

Learning Objectives
  • Learn and understand definition of fraud, fraud identification, detection and fraud prevention.
  • Explore the theories of Edward Sutherland and Donald Cressey.
  • Recognize symptoms of the fraud triangle.
  • Identify how to address symptoms of pressure, opportunity and rationalization.
  • Recognize how the three sides of the fraud triangle work together.
  • Explore types of frauds and how they are committed.
  • Evaluate the profile of the fraudster.
Last updated/reviewed: March 17, 2024

Included In Certifications

This course is included in the following Certification Programs:

11 CoursesBusiness Fraud Identification and Prevention Certification

  1. Introduction to Forensic Accounting
  2. The Fraud Triangle
  3. Fraud: Focus on Corruption
  4. Fraud: Focus on Fraudulent Disbursements
  5. Fraud: Focus on Cash And Assets
  6. Fraud: Focus on Inventory
  7. Fraud: Focus on Financial Statement Fraud – Part One
  8. Fraud: Focus on Financial Statement Fraud – Part Two
  9. Fraud and COSO 2013
  10. Top Occupational Fraud Schemes and Deterrents
  11. Fraud Risk Assessments

32 CoursesInternal Controls and Internal Audit Certification

  1. Internal Audit Standards Overview
  2. Managing the Internal Audit Function in Line with GIAS - Part 1
  3. Managing the Internal Audit Function in Line with GIAS – Part 2
  4. Managing the Internal Audit Function in Line with GIAS – Part 3
  5. Executing the Internal Audit Engagement in Line with GIAS – Part 1
  6. Executing the Internal Audit Engagement in Line with GIAS – Part 2
  7. Identifying and Implementing the Proper Balance of Internal Controls
  8. Documentation Methods For Internal Control Processes
  9. Segregation of Duties for Core Business Processes
  10. Foundations for a Strong Internal Audit Department
  11. Internal Audit Management - Top Skills
  12. Internal Audit: Keys to Managing an Effective Function
  13. Understanding Risk-Based Auditing
  14. Risk Based Auditing – Establishing a Methodology
  15. Risk Based Auditing – Applying the Methodology
  16. Cyber Risk Frameworks And Concepts
  17. Information Technology (IT) Controls in Emerging Business Environments
  18. Fraud Risk Assessments
  19. Professional Skepticism - Keys to Maintaining
  20. Introduction to Forensic Accounting
  21. The Fraud Triangle
  22. Internal Audit Effective Relations with the Audit Committee
  23. COSO 2013 Overview
  24. COSO 2013 - Operational Execution
  25. Internal Audit Emerging Risks for 2021 and Beyond - Part 1
  26. Internal Audit Emerging Risks for 2021 and Beyond - Part 2
  27. Internal Audit Emerging Risks for 2021 and Beyond - Part 3
  28. Internal Audit Emerging Risks for 2021 and Beyond - Part 4
  29. Internal Audit Challenges During Times of COVID
  30. Global Internal Audit Standards (GIAS) - Overview and Contrast to 2017 International Professional Practices Framework
  31. Tools for Internal Control Certificate
  32. Lessons of an Auditor- Tools for Internal Control Certificate
25 Reviews (100 ratings)

Reviews

5
Member's Profile
reliably useful and interesting. Love the teacher
5
Member's Profile
The Fraud Triangle is a fundamental concept in auditing and fraud examination, as it provides a framework for understanding the motivations and circumstances that contribute to fraudulent behavior. By applying the Fraud Triangle principles, auditors and fraud examiners can better assess the risk of fraud and develop strategies to prevent or detect it.
5
Anonymous Author
I enjoyed learning about the fraud triangle and how it came about. It was interesting to see that with the right opportunity, rationalization and pressure anyone of us could potentially commit fraud. Definitely made me think about my organization and the controls we need to put in place.
5
Member's Profile
great profile for financial staffing
4
Anonymous Author
this is a good introductory course about fraud risk factors. Suggesting if you could include the 4th factor (capability) which is now becoming acceptable (from fraud triangle to fraud diamond)
5
Anonymous Author
It is a very important course to watch. I found the statistics part particularly interesting. One side note to slide 67 insider trading related bullet point. The surname correctly is Stewart.
4
Anonymous Author
I like this course cause it show me the different categories that could be committed by different areas. It also showed me how the three sides of the Triangle work together.
5
Anonymous Author
Found this course to be a great refresher from what I learned about the fraud triangle in school. Great to be able to apply it to the small business where I work
5
Member's Profile
The course was great. It provides valuable information and statistics that are helpful in understanding the the types of crime and the profile of the fraudster.
5
Anonymous Author
The instructor did an excellent job of explaining the history of the three sides of the fraud triangle as well as the importance of internal controls.
4
Anonymous Author
I found it interesting how the fraud triangle was described in this course, with the information by whom it was originally developed.
5
Anonymous Author
Nice refresher! Well paced and very interesting. I specially liked the SOD and ineffective management monitoring sections.
5
Member's Profile
The course was easy to follow and understand. The presenter's summary was useful when taking the exit exam.
4
Member's Profile
The course covered the objectives and the slides were complete and concise. Properly covered all material.
5
Anonymous Author
The Fraud Triangle course was an excellent training tool! It is beneficial to my duties in the work place.
5
Anonymous Author
The dissecting of the fraud triangle was done very nicely, and enjoyed the education of its becoming.
5
Member's Profile
Excellent course. Instructor was able to bring up relevant examples to sustain interest in course.
5
Member's Profile
Another good course for someone interested in pursuing a career in fraud investigation.
5
Anonymous Author
Very informative general overview of the fraud triangle, its history and components.
3
Member's Profile
Great refresher on the fraud triangle and the current profile of the fraudster.
5
Anonymous Author
I liked the explanation and context given to the fraud triangle.
5
Anonymous Author
Excellent course. Really covered all the bases on this topic.
5
Member's Profile
good.very informative and provided a holistic understanding.
5
Member's Profile
Clear and well thought out analysis of the fraud triangle.
5
Anonymous Author
The course is a great overview regarding the topic.
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Prerequisites
Course Complexity: Intermediate

No Advanced Preparation or Prerequisites are needed for this course. 

Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
  Course Overview CPE
Course Syllabus
INTRODUCTION AND OVERVIEW
  Introduction to Dissecting the Fraud Triangle3:23
Dissecting the Fraud Triangle
  Edward Sutherland Theories3:27
  Donald Cressey5:33
  Symptoms of the Fraud Triangle2:07
  Pressure10:09
  Opportunity6:30
  Addressing Weak Internal Controls3:46
  SOD7:25
  Ineffective Management Monitoring5:19
  Rationalization5:24
  Three Sides of Triangle Working Together5:03
  Illegal Acts and Connection to Fraud8:10
CONCLUSION
  Profile of Fraudster7:35
CONTINUOUS PLAY
  Dissecting Fraud Triangle1:13:53
SUPPORTING MATERIALS
  Slides: Dissecting the Fraud TrianglePDF
  Dissecting the Fraud Triangle Glossary/IndexPDF
REVIEW AND TEST
  REVIEW QUESTIONSquiz
 FINAL EXAMexam