The Fraud Triangle And Fraud Scale

3490 Words Sep 23rd, 2014 14 Pages
Use the Fraud Triangle and Fraud Scale to analyse the actions of Bernie Ebbers and Scott Sullivan. What does your analysis suggest?
As Albrecht et al. (2012) illustrate, there are many ways to commit fraud but common to all frauds are the following three elements, which make up the fraud triangle:
1. A perceived pressure
2. A perceived opportunity
3. A rationalization of the fraud as acceptable
These three elements are almost always present in every fraud and are interactive. This gives rise to the fraud scale. As Albrecht et al. (2012) suggest, if you eliminate one of the elements, you can eliminate fraud. Also, the scale illustrates that the greater the perceived opportunity or the more forceful the pressure, the less rationalisation it takes to motivate someone to commit the fraud. The vice versa is true too; the more dishonest a perpetrator is, the less opportunity and/or pressure it takes to motivate the fraud.
The fraud triangle and scale can be related to the scandal of WorldCom and the actions of Bernard J. (Bernie) Ebbers and Scott Sullivan, WorldCom’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), respectively.
Albrecht et al. (2012) state that perceived pressure is typically distributed into four main groups including financial pressures, work-related pressures and other types of pressures such as lifestyle and social pressures. The motivation for fraud can be to benefit oneself or one’s organisation. With the case of WorldCom, one of the main…
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