Master’s Thesis
Presentation
(Updated and Adapted 2015)
Pressure
Opportunity
Fraud
Rationalization
Antisocial
Narcissism
By Gregory E. Geisert, CPA


Professional Experience – 30 years of Finance,
Accounting, Financial Audits, Operational
Audits, Business Process Reviews, and Fraud
Examinations
From the Frontlines
The P-Card Billionairess
 Code-free Russian Programming
 Promoter Girls Just Wanna Have Fun
 All in the Family Payroll
 The AP Guy Who Had it All

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

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Asset Misappropriation – Most common at 85%.
Involves the theft of assets through fraudulent
disbursements, taking of inventory, and stealing
cash from sales.
Corruption – Characterized by employee abuse of
power. Includes bribery, extortion, and kickbacks.
Fraudulent Statements – This category includes
employee reporting of false or misleading
statements of a financial nature, such as concealed
liabilities or overstated revenue in published
reports.
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 To create an expanded model for understanding white-collar
criminality by synthesizing generally accepted models of
occupational fraud, traditional clinical psychology, and Freudian
concepts of narcissism and sociopathy;
 To incorporate behavioral traits commonly associated with
Antisocial and Narcissistic Personality Disorders, and to
examine their relevance as potent indicators of predisposition to
commit occupational fraud;
 To provide the users of such information an enhanced basis
for identifying and dealing with workplace criminality in the
discharge of corporate fraud risk assessment, detection, and
investigative activities.
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MOTIVE
MEANING
Impact of
White Collar
Crime
Synthesis
Pressure
Theories of
Causation
Antisocial
Narcissism
Freud
Opportunity
Fraud
Rationalization
Antisocial
Narcissism
 Leads to better understanding and awareness for practitioners.
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
ACFE 2014 Report to the Nations on Occupational
Fraud and Abuse:

Total global fraud loss reached an estimated $3.7
Trillion, or 5% of worldwide GDP
• United States’ entire annual budget = $3.6 Trillion
• 5½ times the total market cap of world’s largest
corporation, Apple = $650 Billion.



Avg. victim is a small, private businesses
Avg. perpetrator is a 36-45 college-educated man
Median loss per single case was $145,000
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Universally higher costs for goods and services
Dislocation of income – perpetuation of
poverty cycle in the developing world
Directly retards the value of investments,
including homes and securities held for
retirement in the developed world
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
Edwin Sutherland – University of Chicago
Sociologist and “Godfather” of Criminology
Differential Association (1939) – Deviance is learned as a
process of cultural transmission.
 Dishonest employees infect a portion of the honest ones
and honest employees influence some of the dishonest.

• Supported today by Barbara Toffler (2004) Final Accounting:
Ambition, Greed, and the Fall of Arthur Andersen

Donald Cressey
Co-authored Principles of Criminology with Sutherland
 Developed The Fraud Triangle

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Pressure
Opportunity
Rationalization
All good, but it doesn’t really address deeper motives
revealed through examining the complex layers of
human mental life as understood, in part, from the
perspective of personality psychology.
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The Fourth Dimension: Antisocial
Narcissism using DSM 5
The Narcissist
• Grandiose
• Preoccupied with power
and success
The
• Feels special, unique
Antisocial
• Seeks admiration
Narcissist
• Feels entitled
• Exploitative
• Lacks empathy
• Envious
• Arrogant
The Antisocial
• Does not conform with
social norms, laws
• Deceitful
• Impulsive
• Manipulative
• Irritable, aggressive
• Disregards safety
• Consistently
irresponsible
• Lacks remorse,
rationalizes theft
The Antisocial Narcissist May Present Characteristics from Both Sets.10
ACFE Red Flags and DSM-5 NPD
and APD Analogues
Analogues
To DSM-5
Criteria for
NPD
Analogues
To DSM-5
Criteria for
APD
Living Beyond Means
Feels Entitled
Seeks Admiration
Goal-setting based on personal
gratification
Irritability
Addiction Problems
—
Persistent or frequent angry feelings
Violation of Laws
Disregard for Safety (Health)
Irresponsibility
Impulsivity
Impulsivity
Possible Deceitfulness
Risk-Taking
Nonconformance to Rules
ACFE
Red Flag
—
Wheeler-Dealer Attitude
Refusal to Take Vacations
Complains – Lack of Authority
Complains – Inadequate Pay
Control issues, Unwillingness
to Share
Feels Pressured by Others
to Succeed
Financial Difficulties
Grandiosity
Seeks Admiration
Arrogance
—
Preoccupation with Power
Possible Arrogance
Possible Feels Entitled
Feels Entitled,
Possible Exploitation
Possible Envy
Preoccupation with Power
Possible Arrogance
Unwillingness to Conform with Social
Norms
Preoccupation with Success
-
Possibly resulting from Need for
Admiration/Entitlement
Irresponsibility
Possible Problems with authority
Unwillingness to Conform to Rules
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Simplified Freudian View
of the Personality
SUPEREGO
EGO
The
personality’s
reality-based
“Controller”
responsible for
reasoning and
learning.
Incorporation of societal
morality. Two
subcomponents:
EGO
SUPER
EGO
ID
ID
Present from
birth. Raw,
impulsive
behaviors
driven by
wants and
needs such as
sex and hunger.
Conscience - Seeks to
avoid consequences of
moral deviance
Ego-Ideal – Seeks to
achieve moral propriety
through obeying
approved rules
Points of Conflict
PERSONALITY
If significant and
unresolved, will result in
neuroses when
internalized, or be might be
externally expressed
through aggression and
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deviance

Focus intensely on the motives and subconscious
drivers behind human actions, reactions, dreams,
illnesses, accidents. Specific deviance may be from:





Unresolved conflicts among constituent personality
components – past suffering from early childhood
Severe Superego – highly moralist, pre-existing guilt before
the crime
Underdeveloped Superego – lack of “normal” conscience
Weak Ego – results in hyper-Egoic behaviors such as
arrogance, excessive need for admiration, entitlement
Un(der)regulated ID – impulsiveness, lack of if-then logic
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

The three main professional bodies governing
the practices of auditing and fraud examination
are the American Institute of Certified Public
Accountants (AICPA), The Institute of Internal
Auditors (IIA), and The Association of
Certified Fraud Examiners (ACFE).
These three professional bodies require
awareness and consideration of fraudulent
activities.
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
An auditor or fraud examiner when cognizant
of, and properly trained to look for, certain
asocial behavioral traits, might use this
information:


when assessing an organization’s risk of fraudulent
conduct, and
when investigating suspected acts of fraud
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FACTOR
RESULTS
SCORE
(1-10)
RESPECT FOR SOCIAL NORMS/LAWS
Does the Company have a Code of Ethics program in place, and are employees aware of it? Are
employees required to submit periodic statements of compliance?
RESPECT FOR SOCIAL NORMS/LAWS
Is there a process in place to address employee concerns of wrongdoing?
RESPECT FOR SOCIAL NORMS/LAWS
Has company management been involved in serious or persistent legal problems due to violations?
RESPECT FOR SOCIAL NORMS/LAWS/EMPATHY
Is there a formal process in place to address employee grievances outside of the employees’ direct
reporting chains?
RESPONSIBILITY
Does management appear to exercise conservative stewardship of the business?
EGO/CONTROL
Is the company/department controlled by authoritarian leadership, dominated by a single person or
“charismatic” leader?
CONTROL
Are employees delegated decision-making authority commensurate with their positions?
EMPATHY & SAFETY
Does management display concern from employee safety? Have there been serious or continuous
infractions of labor laws concerning safety?
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FACTOR
RESULTS
SCORE
(1-5)
RESPECT FOR SOCIAL NORMS / LAWS
Does the subject have a prior criminal history?
RESPECT FOR SOCIAL NORMS / LAWS
Does the subject support the use of policies and procedures?
Does subject believe that rules should be followed and
consistently applied?
ID / IMPULSIVITY
Does the subject display impulsive or erratic behavior?
RESPECT FOR SOCIAL NORMS / LAWS/ EMPATHY
What does the subject think should happen to people who
break rules?
GRANDIOSITY / ENTITLEMENT/ EGO
Does the subject complain that (s)he does not get the respect
(s)he deserves? Does the subject complain about a lack of
authority?
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Pressure
Opportunity
Fraud
Rationalization
Antisocial
Narcissism
By incorporating the Fraud Foursquare’s
synthetic concept of Antisocial Narcissism as a
critical, new dimension, we derive a more robust
and practical model for understanding and
dealing with occupational fraud and abuse.
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