The Inference of Fraud

Supplementing Cressey’s fraud triangle (Cressey, 1950), I put forth the corruption pentagon, which contains the additional material elements of the following nature: Predisposition (or bias) + Dominant Culture (or applicable jurisdiction). Thus, the corruption pentagon is comprised of opportunity, rationalization, pressure, predisposition, and culture, (Shapiro, 2011). This conceptual framework simply, accurately, and comprehensively describes the genesis and maintenance of corruption, whether in the natural or artificial person (that is, individual or organization).

The corruption pentagon explains the dynamics of corruption, including fraud. It probes more deeply than the fraud triangle into the specific character of the individual and more broadly than the fraud triangle into the specific culture at large that affects the individual. It interprets fraud as a species of corruption. It interprets corruption as more than corruption under the law but corruption in fact independent of the law; that is, there exist lawful and unlawful forms of corruption.