How the Behavior of Rita Crundwell Fits Within the “Fraud Triangle”
The second element of ‘Opportunity’ could be a potential weakness in the system that the precise person could exploit.
The citizens of Dixon were shocked by the scandal and felt the city council should have known what was going on. The media blamed the city’s commission form of government. Subsequent to the fraud, the city changed its form of government and had significant turnover on the city council including the election of a new mayor.
The element of opportunity was strengthened with the lack of due diligence by auditors and bank personnel (Hancox, 2014).
While there is no action that can completely eliminate fraud, implementing policies that address the three arms of the Fraud Triangle will not only help to reduce the risk of fraud, but will also aid in detecting fraud if it does occur.
Hancox, D. R. (2014). How a $53 million fraud went undetected for 22 years. The CPA Journal, 84(5), 65-68.
Udeh, I. A. (2013). Near-unsophisticated fraud: the case of former Dixon’s comptroller. Journal of Business Cases & Applications, 8, 1-9.
Carozza, D. (2018). Small town, huge fraud, insightful documentary. Fraud Magazine, 33(1).