Question

Name and define the three characteristics identified by Dr. Donald Cressei which are common to embezzlers.

Answer 1

The three characteristics that Dr. Donald Cressey identified as common to embezzlers are pressure, oppcrtunity, and rationalization. These three factors have been termed as "the fraud triangle", since they are three things that are often in almost every instance of ernbezzlement. The first characteristic is pressure. Cressey found in his studies that most of those who embezzle did so to meet some sort of financial obligations. The second characteristics is opportunity. Cressey argued that an opportunity must be perceived for someone to embezzle. This characteriatic is one of the most important because it is something that corporation can control more than other two characteristics through the implementation of internal controls. Lastly, the third characteristic is rationalization. Many of the criminals that Cressey studied rationalized their behavior to the point that they didn't even see their behavior as criminal. Cressey's analysis of characteristics common in embezzlement is very interesting. l believe that he accurately isolated the many characteristics into three main, clear, concise factors.  

Characteristics include: #1. Motive -an immediate. unsharable financial need. Try as they might employers cannot completely eliminate the employee's need (whether real or not) for addilional money:-Examples of unsharable financial pressures or needs might be caused by any number of things, such as: excessive spending to keep up appearances of wealth. other oulside business financial strains. an illicit romantic relationship. alcohol, drug or garnbling abuse problems

#2. Opportunity· more controllable than motive. This is the internal control system of a company and therefore within the purview of management and the auditor Employees often think that their unsharable financial need can be satisfied if they can "borrow" from the company and thus take advantage of a trusting relationship. An element which is critical to this line of thinking is that the fraud offender also thinks that the "borrowing" or theft can be concealed

#3. Rationalization -an employee's rationalization is his or her belief that a crime has not been committed. which is the hallmark of fraud offenders. Typical rationalizations might include "borrowing" money temporarily, justifying the theft out of a sense of being underpaid, or depersonalizing the victim of the theft.