Proceedings

environmental or situational factors. The capabilities are generated by the person’s
position or function within the organization that may offer the ability to create or
exploit an opportunity for fraud not available to others. If we consider one important
conclusion retained by the Fraudulent Financial Reporting: 1987–1997, An Analysis
of U.S. Public Companies (Beasley et al., 1999) namely that corporate CEOs were
implicated in over 70% of public-company accounting frauds (indicating that many
organizations do not implement sufficient checks and balances to mitigate the CEO’s
capabilities to influence and perpetuate fraud) the above statement is valid. The
fraudster understands and exploits internal control weaknesses and uses his position to
the greatest advantage. This fact is confirmed by the Association of Certified Fraud
Examiners 2010 survey conclusions: 51% of the perpetrators of occupational fraud
had at least a bachelor’s degree, 49% of the fraudsters were over 40 years, 46% of the
frauds the Association recently studied were committed by managers or executives
(ACFE, 2010).
The fraudster has a strong ego and great confidence that he will not be detected, and
he believes that he could easily talk himself out of trouble if caught. It is important to
emphasize that a person with a very persuasive personality may be able to convince
others to go along with a fraud. This explains what Cressey’s model couldn’t.
In the article “The Human Face of Fraud” Allan Roddy notes that the perpetrator
“makes unusual and significant demands of those who work for him or her, cultivates
fear rather than respect … and consequently avoids being subject to the same rules
and procedures as others.” Many financial reporting frauds are committed by
subordinates reacting to an edict from above to “make your numbers at all costs, or
else” (Allan, 2003).
The research in fraud field reveals a fraud model named MICE. MICE is the acronym
from money, ideology, coercion, and ego (entitlement). Jason Thomas defined the
model taking into consideration that in financial reporting fraud the motivating
elements are monetary incentives, bonuses, or stock options. In this respect, top
executives feel the presure to provide solid financial results, based on above
mentioned elements, being to the delimitated nonshareable individual pressure
described by Cressey. The present paper authors appreciate that MICE model
responds to the well known cases of Enron, WorldCom, Adelphia, Phar-Mor. In all
these cases, the perpetrators appeared to be motivated by money, ego, and entitlement.
The MICE model includes also the ideology aiming at explaining frauds like tax
evasion and terrorist financing.
3. PERPETRATORS’ PROFILE
The authors’ documentation on fraus and forensic accounting literature reveals the
existance of a two defined types of perpetrators: the “predator” and the “accidental
fraudster”.
In their work, Forensic Accounting and Fraud Examination, Kranacher, Riley, and
Wells characterize "accidental fraudster” by the following characteristics: first-time
offender; middle-aged; well-educated; trusted employee; in a position of
responsibility; and considered a good citizen through service works at the office, in
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