When situational pressures and perceived opportunities are low and personal integrity is high, occupational fraud is much more likely to occur than when the opposite is true.

The traditional “fraud triangle,” first articulated by criminologist Donald Cressey and adopted by the ACFE, holds that occupational fraud is most likely when (1) pressure (or incentive) is high, (2) opportunity is high, and (3) the perpetrator’s personal integrity is low enough to allow rationalization of the act. Therefore, when situational pressures and perceived opportunities are low and personal integrity is high—the opposite of the triangle’s risk conditions—the probability of occupational fraud is comparatively low, not “much more likely.” Hence the statement is false. Why the Other Option (“True”) Is Wrong: Selecting “True” would ignore the widely accepted fraud-triangle model. Low pressure, low opportunity, and high integrity collectively reduce, rather than increase, the likelihood of fraud; thus the claim cannot be accurate.

A. True: This option is incorrect because it fundamentally misrepresents the established principles of fraud theory. The conditions of low pressure, low opportunity, and high integrity are deterrents to fraud, not catalysts. The likelihood of fraud increases as pressure and opportunity rise and personal integrity (the ability to rationalize) declines.

References:
1. ACFE. (2023). Fraud Examiners Manual, International Edition. Association of Certified Fraud Examiners. Location: Section 2, "Why People Commit Fraud," subsection on "The Fraud Triangle." Content: The manual explicitly details Donald Cressey's hypothesis that "Trusted persons become trust violators when they conceive of themselves as having a financial problem which is non-shareable, are aware this problem can be secretly resolved by violation of the position of financial trust, and are able to apply to their own conduct in that situation verbalizations which enable them to adjust their conceptions of themselves as trusted persons with their conceptions of themselves as users of the entrusted funds or property." These three elements are simplified as Pressure, Opportunity, and Rationalization. The manual clarifies that a high degree of these elements increases the risk of fraud, while a low degree decreases it.

2. Cressey, D. R. (1953). Other People's Money: A Study in the Social Psychology of Embezzlement. The Free Press. Location: Chapter 1, "The Violation of Financial Trust." Content: This is the foundational research for the Fraud Triangle. Cressey's thesis establishes that for a violation of trust (fraud) to occur, the individual must experience a non-shareable financial pressure, perceive an opportunity to resolve it by violating their trust, and be able to rationalize their actions. The absence of these conditions, as described in the question, would prevent the fraud from occurring according to Cressey's model.

3. Albrecht, W. S., Albrecht, C. O., & Zimbelman, M. F. (2012). Fraud Examination (4th ed.). Cengage Learning. Location: Chapter 2, "Why People Commit Fraud," pages 34-38. Content: This university textbook, widely used in accounting and fraud examination courses, explains the fraud triangle in detail. It states, "fraud occurs when a perceived pressure, a perceived opportunity, and some way to rationalize the fraud as acceptable are all present... When one or more of the elements of the fraud triangle is not present, fraud is less likely to occur." The question describes a scenario where all three elements are either absent or negated (high integrity prevents rationalization), thus making fraud highly unlikely.

4. Wells, J. T. (2011). The Fraud Triangle Revisited. Fraud Magazine. Association of Certified Fraud Examiners. Location: March/April 2011 issue. Content: In this article, the founder of the ACFE revisits the core concepts of the Fraud Triangle. He reinforces that the convergence of high pressure, opportunity, and rationalization creates the highest risk for fraud. The article implicitly supports that the inverse—low pressure, low opportunity, and high integrity—would create the lowest possible risk.

1. ACFE. Fraud Examiners Manual

2023 Edition

Section I: Financial Transactions & Fraud Schemes

“The Fraud Triangle

” pp. 1.100-1.104.

– explains that high pressure

high opportunity

and low integrity/rationalization are the three necessary elements for occupational fraud.

2. Wells

J. T. (2001). “The Fraud Triangle.” Journal of Accountancy

vol. 192(2)

pp. 89-91. https://doi.org/10.2308/jofa.2001.192.2.89

– summarizes Cressey’s model and clarifies that fraud risk diminishes when pressure and opportunity are reduced and integrity is strong.

3. Dorminey

J.

Fleming

A.

Kranacher

M.-J.

& Riley

R. (2012). “The Evolution of Fraud Theory.” Issues in Accounting Education

27(2)

555-579. https://doi.org/10.2308/iace-50131

– reviews empirical research confirming that the absence of the three elements (especially low pressure and opportunity) diminishes the likelihood of occupational fraud.