The Fraud Triangle on trial

Dr. Donald Cressey’s Fraud Triangle has endured because it’s correct and simple. However, the ACFE has never stated that the triangle can explain every case of fraud. So, be careful when you use the Fraud Triangle in court. The judge might reject it. The Fraud Triangle is a useful tool to help us understand why and how people commit fraud, but it’s not a scientific theory.

If you’re a CFE, or if you’ve been an ACFE member for any length of time, you’ve heard of the Fraud Triangle. It illustrates core principles of the ACFE’s training in understanding how fraud occurs.

In the July/August 2014 issue of Fraud Magazine, Dr. Steve Albrecht, CFE, the ACFE’s first president and one of the foremost researchers on fraud, wrote what I consider to be the definitive history of the Fraud Triangle, “Iconic Fraud Triangle Endures.” I recommend you read this excellent article. I won’t rehash history here, but I’ll borrow Dr. Albrecht’s excellent summary: