The factors causing fraudulent behaviour were best described by Fraud Triangle of Donald R. Cressey and Edwin Sutherland. For years, academicians and practitioners used fraud triangle for fraud deterrence -to show which factors should be removed. These were incentive or pressure, opportunity and rationalisation. The fourth factor, capability, is added by David T. Wolfe and Dana R. Hermanson and redefined the fraud triangle concept as ‘Fraud Diamond’ in their article published in CPA Journal in December 2004. Please see the link for the full article.

Although this completes the four pillars of fraud, capability is different from the other three concepts. We, the professionals working on fraud, by nature, needs to find solutions to other three factors leading fraud. However, capability is not something that companies and fraud professionals can and should find solutions. Companies cannot choose working with employees who might have capability problems. Also, all employees need to be a soldier in fraud risk management. Thus, although Wolfe and Hermanson’s capability factor completed the picture showing all possible reasons of fraud, Cressey and Sutherland’s Fraud Triangle is still unique in fraud deterrence in practical life.