From research, it is evident anyone can be involved and commit fraud and these perpetrators cannot be differentiated from other persons based on their demographic or psychological traits. Fraud perpetrators profiles tend to be highly appealing and appear honest (Lokanan, 2015). For instance, in the case scenario “Darren Jones and AE&P Inc- A Story of Sticky Fingers” Darren Jones comes out as a highly reputable and experienced person with eight-years-experience in the accounting. With this level of knowledge, skills and abilities, being in involved in fraud was shameful and unethical. There are a range of factors and circumstances that motivate people to commit fraud namely financial stress/pressures or job-related stress (Lokanan, 2015). Additionally, perceived opportunity and their capability to rationalize their negative actions motivate people to commit fraud. The three, perceived pressure, opportunity and rationalization are linked into fraud triangle.
From the case study, “Darren Jones and AE&P Inc- A Story of Sticky Fingers” it is evident that financial pressure facilitated Darren Jones fraud actions. Darren move to a more luxurious home increased his expenditure significantly. From the case, Darren was in a monetary crisis because move to a luxurious home meant that he would pay more for rent and food for himself and his family and his salary could not meet all these needs. Because of this experience, Darren had to find ways to meet his financial needs through unethically manipulating the system which he was in charge.
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Generally, there are varying types of pressures that force people to commit fraud namely monetary pressures, job-related pressures and vices among others (Tessier, 2017). In case of Darren Jones, his financial pressure was a result of greed, high living standards that are beyond his financial capability, high bills and unanticipated financial needs. Additionally, job -related pressure is evident. In the case, Darren diverted into his personal based on argument that he had worked for AE&P Inc. for many years without pay increase. This a straightforward evidence that Darren felt that he was poorly paid for his services to the company.
For a fraud to be successful, there are must something to steal and an opportunity to do it (Tessier, 2017). In this case scenario, Darren had the opportunity and capability to divert money in the account receivables into his personal account. There are a range of factors that fascinated this opportunity namely incapability to anticipate the quality of Darren performance, inadequate access to account receivables information being manipulated by Darren, lack of effective control system and lack of audit tracking. An effective control system must avert or detect the fraudulent behaviors and activities. If AE&P Inc. had an effective system, it would have deterred Darren Jones actions of fraud. For this reason, effective control system and structure is one of the key step that any company can take to detect and avert fraud and ensure that its employees uphold the required ethical standards in their decisions and actions.
Almost every fraud encompasses the element of rationalization. For first time fraudsters like Darren Jones, rationalization assists them reduce the perceived dishonesty of their actions (Tessier, 2017). Darren believed that he deserved more, he would pay the money back and that he would fix the books of account. Darren Jones rationalized his acts and decisions by concluding to himself that his supervisor was aware of his monetary distress and could loan him money. He believed that his financial pressure was a short-term problem little did it turn out as a long-term problem as more money was needed to support his family. He convinced himself that the he had worked for AE&P Inc. for many years without pay increase and this was the best opportunity to reward himself. He diverted funds into his personal accounts and misstated client’s accounts due to his greed and selfishness. Darren was highly knowledgeable, and held position of trust providing him an opportunity to commit fraud.
- Lokanan, M. (2015). Challenges to the fraud triangle: Questions on its usefulness. Accounting Forum, 39 (3). pp. 201-224.
- Tessier D.R. (2017). The Fraud Triangle Theory. Clmmag.theclm.org. Retrieved 5 August 2017, from http://clmmag.theclm.org/home/article/Insurance-fraud-triangle-theory
