Development of the Theory of Fraud Towards the New Fraud Triangle

Abstract

The phenomenon of fraud in the business world, especially fraud in financial statements is a very interesting phenomenon to be discussed. This is because the phenomenon of fraud is a phenomenon that can cause losses in business, ranging from the scale of small losses to bankruptcy. Therefore, various types of developments in the theory of fraud appear that discuss the causes of fraud. This article seeks to explore more deeply about the development of the theory to the latest model of fraud theory, namely The New Fraud Triangle. This article conducts a discussion based on some literature such as from books and journal articles as reference sources. The results of the discussion have shown that from the beginning until now there have been six types of fraud theory namely white collar crime theory, triangle fraud theory, fraud scale theory, diamond fraud and M.I.C.E models, the new fraud triangle model. The six models of fraud theory conduct discussions on fraud actions and complement each other between one theory and another. Thus, future research is expected to be able to carry out empirical testing related to fraud theories that have never been used as a theoretical basis in previous studies.