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The study covered several areas, one of the most interesting of which concentrated on the motivations of the perpetrators of occupational frauds and abuses. They classified these motivators as one of nine different types:

  • 1.

    Living beyond their means

  • 2.

    An overwhelming desire for personal gain

  • 3.

    High personal debt

  • 4.

    A close association with customers

  • 5.

    Feeling pay was not commensurate with responsibility

  • 6.

    A wheeler-dealer attitude

  • 7.

    Strong challenge to beat the system

  • 8.

    Excessive gambling habits

  • 9.

    Undue family or peer pressure28

As can be seen from the list, these motivators are very similar to the nonsharable fi- nancial problems Cressey discussed. The study by Albrecht et al. also disclosed several interesting relationships between the perpetrators and the frauds they committed. For example, perpetrators of large frauds used the proceeds to purchase new homes and ex- pensive automobiles, recreation property, and expensive vacations, to support extra- marital relationships, and to make speculative investments. Those committing small frauds did not.

There were other observations: Perpetrators who were interested primarily in “beat- ing the system” committed larger frauds. However, perpetrators who believed their pay was not adequate committed primarily small frauds. Lack of segregation of responsibil- ities, placing undeserved trust in key employees, imposing unrealistic goals, and operat- ing on a crisis basis were all pressures or weaknesses associated with large frauds. College graduates were less likely to spend the proceeds of their loot to take extravagant vacations, purchase recreational property, support extramarital relationships, and buy expensive automobiles. Finally, those with lower salaries were more likely to have a prior criminal record.29

Like Cressey’s study, the Albrecht study suggests there are three factors involved in oc- cupational frauds: “a situational pressure (nonsharable financial pressure), a perceived opportunity to commit and conceal the dishonest act (a way to secretly resolve the dis- honest act or the lack of deterrence by management), and some way to rationalize (ver- balize) the act as either being inconsistent with one’s personal level of integrity or justifiable.”

The Fraud Scale

To explain the concept, Albrecht developed the “Fraud Scale,” shown in Exhibit 1.2, which included the components of situational pressures, perceived opportunities, and personal integrity.30 When situational pressures and perceived opportunities are high and personal integrity is low, occupational fraud is much more likely to occur than when the opposite is true.31


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