*2.1.1.5 The fraud diamond<sup>11</sup>*

The Diamond Theory of Fraud later came to be considered a more comprehensive theory in relation to the theory proposed by Cressey [2]. For Wolfe and Hermanson [3], the probability of occurrence of fraud can be due to the presence of

<sup>10</sup> https://www.acfe.com/

<sup>5</sup> Identity theft or identity theft is the appropriation of a person's identity: impersonating that person, assuming their identity before other people in public or in private, generally to access certain resources or to obtain credit and other benefits on behalf of that person.

<sup>6</sup> The Ponzi Scheme is a fraudulent investment transaction that involves paying current investors the interest earned on new investor money (and not on generating genuine profits). It is a pyramid system, in which the only way to distribute benefits requires participants to recommend and attract (refer) more clients in order for new participants to produce benefits to primary participants.

<sup>7</sup> Phishing is the most popular technique, where the attacker impersonates a real entity, generally a bank, in order to obtain the user's data in resources contracted with that company such as a bank account, password, etc.

<sup>8</sup> Donald Ray Cressey (April 27, 1919 through July 21, 1987) was an American sociologist and criminologist who made ground breaking contributions to the study of organized crime, prisons, criminology, the sociology of criminal law, white collar crime

<sup>9</sup> Edwin H. Sutherland (1883–1950) was an American sociologist. He is considered one of the most influential criminologists of the 20th century. He belonged to the school of symbolic interactionism, and is known for the definition of differential association, a general theory of crime and delinquency that explains how the marginalized have come to learn the motivations and know-how to commit criminal activities. Sutherland received his doctorate in Sociology from the University of Chicago in 1913. He chaired the American Sociological Association in 1939.

<sup>11</sup> 12–2004-"The Fraud Diamond: Considering the Four-Elements of Fraud"-David T. Wolfe-Dana R. Hermanson: https://digitalcommons.kennesaw.edu/cgi/viewcontent.cgi?article=2546&context=facpubs

*New Fraud Star Theory and Behavioral Sciences DOI: http://dx.doi.org/10.5772/intechopen.93455*

four factors; the diamond theory of fraud can be represented by the following equation:

$$\mathbf{P}\text{ (fraud)} = \mathbf{f}\text{ (O,I,R,C)}\tag{2}$$

in which the term P (fraud) represents the probability of fraud occurring, being a function (f) of the terms O, which represents the opportunity, I, which refers to individual intentions and R, which represents the rationalization or attitude personal and C, which represents ability (**Figure 2**).

Greed.

Pride.

Arrogance.

The thought of the right to deserve everything.

First, it covets, because the executive can use his position and authority to get what he wants (money, status, title, and services); second, pride and arrogance; the executive who feels superior to others, and does not allow anyone to question or disqualify him. Finally, the executive who thinks that he has the right to everything and he deserves the best, and that is why he does everything possible to obtain it.

The International Framework for Professional Practice (IPPF) of the Institute of Internal Auditors (IIA)<sup>12</sup> defines fraud as follows [14–30]:

"Any illegal act characterized by deception, concealment or breach of trust. These acts do not require the application of a threat of violence or physical force. Fraud is perpetrated by individuals and organizations to obtain money, goods, or

<sup>12</sup> https://iaia.org.ar/nosotros/the-institute-of-internal-auditors/
