Understanding Financial Statement Fraud: The Fraud Triangle Framework

Financial statement fraud is rarely the work of a career criminal. It is usually committed by senior people at real companies who were under pressure, saw a gap in the controls and told themselves a story that made it acceptable. This course teaches the fraud triangle, the framework Donald Cressey built from interviews with convicted embezzlers, as the lens auditors, compliance officers and investigators use to explain and anticipate that behaviour. You will separate error and aggressive accounting from fraud, then study each side of the triangle in depth with Indian evidence: covenant breaches, promoter pledges and guidance pressure; weak controls, captured audit committees and related party complexity; and the language of rationalisation in letters, earnings calls and annual reports. Satyam, IL&FS, DHFL and Gensol Engineering are read through the framework. The course then covers its extensions (the fraud diamond, pentagon and fraud scale), its honest limitations, and how it is embedded in Indian practice through SA 240 and the RBI Master Directions on Fraud Risk Management. Written for aspiring forensic auditors, compliance officers at banks and NBFCs, and finance professionals in risk and compliance roles.