Implementation of fraud triangle theory: A systematic literature review

Abstract

Fraud triangle theory popularized by Cressey (1953) and adopted by Statement of Auditing Standards No. 99, states that fraud occurs when there are three elements, namely: pressure, opportunity, and rationalization. This theory is criticized because it is considered unable to describe all the motivations of fraud perpetrators. This study aimed at developing Homer (2020) research, expanding it with criticism and developing variables in the fraud triangle. This research did not only focus on types of fraud based on the fraud tree but also added academic fraud. Methodologically, this research was a systematic literature review using six steps in determining the samples. This study summarized 25 Scopus articles using at least one element of the fraud triangle. From the 25 included studies, 80 percent reviewed the three elements of the fraud triangle in their research. As much as 60 percent of research results supported that the three elements of the fraud triangle can increase fraud motivation. Although the fraud triangle theory has received much criticism, researchers are trying to develop the fraud triangle theory by adding other variables and with theoretical support. This review recommends filling the research gap in developing the fraud triangle theory by looking at previous researches.