Fraud Detection Model

The Fraud Detection Model proposed by Albrecht provides a behavioural and environmental framework for understanding the motivations behind fraudulent behaviour and enhancing organisational detection methods. The Albrecht Model emphasises the interplay between situational pressures, perceived opportunities, and personal integrity, in contrast to models that focus solely on opportunity or pressure. This trio of factors illustrates both the reasons for fraud and the obvious indicators that often accompany fraudulent conduct. By analysing these fundamental variables, businesses gain an understanding of the origins of fraud and the first signs that facilitate its detection.

A fundamental aspect of the Albrecht Model is the notion that fraud is more likely when demands are high, opportunities are available, and personal integrity is compromised. Situational pressures may encompass economic difficulties, job unhappiness, or external commitments; opportunities may emerge from inadequate controls or access to confidential processes; and integrity signifies an individual’s ethical resilience against misconduct. The probability of fraud increases considerably when these three components align disadvantageously. Albrecht emphasises that behaviour frequently alters under pressure, suggesting that behavioural symptoms may serve as preliminary indicators in detection efforts.

The concept promotes fraud detection by prompting firms to observe not just financial trends but also behavioural indicators, such as defensiveness, lifestyle changes, unwillingness to delegate responsibilities, or undue control over information. These symptoms frequently manifest when personal integrity is compromised or when individuals attempt to conceal misconduct. Integrating behavioural monitoring into fraud detection tools enables firms to identify warning indications sooner and examine potential concerns before they escalate. The Albrecht Model enhances fraud detection by combining human behaviour, organisational factors, and control weaknesses into a cohesive and pragmatic framework.

References

Albrecht, W. S., Albrecht, C. C., Albrecht, C. O., & Zimbelman, M. F. (2019). Fraud Examination (6th ed.). Cengage Learning.