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Fraud Triangle Theory and Fraud Diamond Theory. Understanding the Convergent and Divergent For Future Research

Author

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  • Rabi’u Abdullahi

  • Noorhayati Mansor

Abstract

Many of the world’s most prominent organizations have experienced large-scale frauds. These frauds have had disturbing effects on our world’s economy in addition to contributing unnecessary suffering and increased unemployment for the low and middle class. With the aim of further understanding the fundamental motivations of fraud, this paper takes an in-depth look at the convergent and divergent of two classical fraud theories which are: (i) fraud triangle theory; and (ii) fraud diamond theory. This comparison is important to assist anti-graft bodies and organizations in formulating a practical strategy to prevent and investigate organizational frauds. The paper takes a conceptual approach by first examining the concept of fraud, then discussing the convergence of the two classical theories, and finally differentiating them. By doing so, the similarities and differences between them are highlighted and appreciated for fraud prevention purposes. The study uses secondary sources of information obtained from journal articles, textbooks and the internet. The discussion of the two theories contributes to the understanding of frauds especially by forensic accountants, auditors, fraud examiners and other antifraud bodies. The study also serves as guidance for further fraud related research.

Suggested Citation

  • Rabi’u Abdullahi & Noorhayati Mansor, 2015. "Fraud Triangle Theory and Fraud Diamond Theory. Understanding the Convergent and Divergent For Future Research," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 5(4), pages 38-45, October.
    • Handle: RePEc:hur:ijaraf:v:5:y:2015:i:4:p:38-45
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    References listed on IDEAS

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    1. Shabnam Fazli Aghghaleh & Zakiah Muhammaddun Mohamed, 2014. "Fraud Risk Factors of Fraud Triangle and the Likelihood of Fraud Occurrence: Evidence from Malaysia," Information Management and Business Review, AMH International, vol. 6(1), pages 1-7.
    2. Kirsty Rae & Nava Subramaniam, 2008. "Quality of internal control procedures: Antecedents and moderating effect on organisational justice and employee fraud," Managerial Auditing Journal, Emerald Group Publishing, vol. 23(2), pages 104-124, January.
    3. Rabi’u Abdullahi & Noorhayati Mansor, 2015. "Concomitant Debacle of Fraud Incidences in the Nigeria Public Sector: Understanding the power of Fraud Triangle Theory," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(9), pages 241-255, September.
    4. Patrick Kelly & Carol A. Hartley, 2010. "Casino gambling and workplace fraud: a cautionary tale for managers," Management Research Review, Emerald Group Publishing Limited, vol. 33(3), pages 224-239, March.
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