The Evolution of Fraud Theory

This paper revisits the Fraud Triangle, highlighting recent findings and contemporary thinking in the anti-fraud community to develop a meta-model of fraud for use in accounting instruction and research. The importance of the Fraud Triangle is particularly important as a model for assessing the risk...

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Bibliographic Details
Published in:Issues in accounting education 2012-05, Vol.27 (2), p.555-579
Main Authors: Dorminey, Jack, Fleming, A. Scott, Kranacher, Mary-Jo, Riley, Richard A.
Format: Article
Language:English
Subjects:
Accounting
Assurance services
Audit risk
Crime
Criminals
Criminology
Educational Facilities Improvement
Educational Resources
Financial Problems
Fines & penalties
Fraud
Instructional design
Interdisciplinary Approach
Perceptions
Risk assessment
Studies
Trust
Violence
White collar crime
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Summary:This paper revisits the Fraud Triangle, highlighting recent findings and contemporary thinking in the anti-fraud community to develop a meta-model of fraud for use in accounting instruction and research. The importance of the Fraud Triangle is particularly important as a model for assessing the risk of fraud, but it is only one component of an overall audit risk assessment plan. Explicit reference to the auditor's responsibility in identifying the risks of material misstatement arising from fraud is included in the guidance provided by both the AICPA and PCAOB (2010). Identifying fraud risk is a significant element of assurance services, and necessitates a model reflecting the current thinking surrounding the fraud event. To enhance our understanding of the fraudster's motivations and improve the anti-fraud community's ability to prevent, deter, detect, investigate, and remediate fraud, researchers and practitioners have offered insights beyond the Fraud Triangle. These insights are summarized in this manuscript and presented in a meta-model, providing a foundational resource for educators and researchers pursuing the study of fraud. Key aspects of the meta-model include instructional benefits in the classroom and an empirical approach from a research standpoint.
ISSN:0739-3172
1558-7983
DOI:10.2308/iace-50131