Advancing theory of fraud: the S.C.O.R.E. model

Publication Date07 Jan 2019
AuthorGeorgios L. Vousinas
SubjectAccounting & Finance,Financial risk/company failure,Financial crime
Advancing theory of fraud:
the S.C.O.R.E. model
Georgios L. Vousinas
National Technical University of Athens, Athens, Greece
Purpose This paper aimsto elaborate on the theory of fraud by enhancing the existingtheories behind the
factors thatforce people to commit fraud.
Design/methodology/approach The paper reviews the most commonly used and widely accepted
models for explainingwhy people commit fraud the fraud triangle, the fraud diamond, the fraudscale and
the MICE model. The author argues that these models need to be updated to adapt to the current
developmentsin the eld and the ever-growing fraud incidents, both in frequency and severity, and builds on
the theoreticalbackground to create a new model so as to enhance the understanding behind the major factors
which lead to the commitmentof fraud.
Findings The author identiesa major element ego whichplays a crucial role in compelling people to
commit fraud and concludes in the formation of the S.C.O.R.E. model, which is graphically depicted in the
fraud pentagon.He goes further by adding the factor collusion to betterapply in cases of white-collar crimes.
Originality/value The paper develops the S.C.O.R.E. model to contribute to the development of fraud
theory by identifyingthe key factors that play a major role in whether fraudwill actually occur and acting as
a theoreticalbenchmark for all future reference.
Keywords Capability, Opportunity, Fraud, Rationalization, Ego, Stimulus
Paper type Research paper
1. Introduction
Fraud is a widely conceivable concept, but its characteristicsare frequently unrecognizable
and not until it is too late. There are various denitions of fraud, due to its diverse nature,
but for the purpose of this paper, the following widely accepted denition provided by the
Institute of Internal AuditorsInternational Standards for the Professional Practice of
Internal Auditing(Standards) is used:
[...] any illegal act characterized by deceit, concealment, or violation of trust. These acts are not
dependent upon the threat of violence or physical force. Frauds are perpetrated by parties and
organizations to obtain money, property, or services; to avoid payment or loss of services; or to
secure personal or business advantage (The IIAs, 2017).
The only thing that is constant in fraud is changeas it is a dynamic process which is multi-
layered and penetrates into corporate procedures while the fraudsters always nd new
methods to commit fraud and cover their traces. As a result, dealing with fraud is a long,
complicated procedure that requires a deep understanding of both the reasons behind its
occurrence and the ways by which it can be mitigated. So confrontingfraud is like ghting
against the Lernean Hydra[1]. Andfraud is an international problem which can occurin any
organization at any time while fraud incidents are nowadays increasing mainly driven by
the global nancial crisis and the subsequent economic recession. According to the latest
Report to the Nations on OccupationalFraud and Abuse (2016), published by Association of
Certied Fraud Examiners (ACFE), the medianestimate was that fraud costs organizations
5 per cent of revenues each year. To highlight the magnitudeof this estimate, applying this
Journalof Financial Crime
Vol.26 No. 1, 2019
pp. 372-381
© Emerald Publishing Limited
DOI 10.1108/JFC-12-2017-0128
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