Preventing Fraud by Thinking Like a Thief: Rationalization
The key to understanding employees who commit fraud is found in the fraud triangle, an old concept in criminology that still has wide acceptance in the fraud examination field. In order for fraud to occur, three things must be present, and each represents one side of the triangle. The three pieces of every fraud puzzle are opportunity, motivation, and rationalization.
Rationalization
The final piece of the fraud triangle is rationalization, which deals directly with a thief’s personal moral code. People are generally honest and tend to want to behave ethically. In order to commit fraud, a person has to convince herself or himself that it is “okay.” She or he must rationalize and justify the behavior under her or his own moral code.
Feeling that the company “deserves” to be stolen from is a common rationalization, in addition to the idea that the company won’t really be affected by a small theft. Other examples could include “I need it more than they do,” or “I’m just borrowing the money.”
Rationalization is very difficult for management to deal with, because it is impossible to get into someone’s head and determine when theft will be “okay” and when it will not. For that reason, companies are best off not focusing on this factor when attempting to reduce opportunities for employee fraud.
