dollars globally (Button et al., 2012a,2012b;Holtfreter, 2004;Aliabadi et al.,2011). One
projection estimatedthe global losses to exceed over $3.5tn per annum(Chui and Pike, 2013).
In this context, employees and management fraud studies in business organisations are
worth undertaking in an attempt to combat fraud. The need is particularly huge in the
context of developing countries because despite the pervasiveness of the fraud, little
attention has been paid in the prior studies to these contexts (Kassem, 2014;Krambia-
Kapardis and Zopiatis, 2010).
Fraud triangle theory suggests that fraudoccurs only in the presence of perceived fraud
opportunity, a motivation, notably ﬁnancial pressure and the justiﬁcation of the fraud act
through rationalization processes (Cressey, 1950). A few studies extended this theory by
modifying the elements of the triangle while others introduced more macro-issues for fraud
occurrences, such as societal, cultural, industry, group and organisational inﬂuences
(Ramamoorti et al., 2009;Zahra et al., 2007;Wolfe and Hermanson, 2004;Kranacher et al.,
2011). Yet, other studies have questioned the role of some elements as inapplicable to some
fraudsters, such as predators as opposed to most accidental fraudsters (Dorminey et al.,
Few empirical studies have discussed fraud occurrences and deterrents in developing
economies. However, almost all of these studies have paid particular attention to isolated
cases of corruption or mismanagementin the public sector, leaving a majority of other forms
of fraud and other businesses unattended (Teh, 1997;Otusanya, 2012;Shehu, 2004). More
importantly, empirical studies on fraud in Tanzania are hardly found despite the
occurrences of scams, suchas BAE radar fraud, EPA, Tegeta escrow, DECI, TPA losses and
many others (Doyle, 2011;Hosken, 2009;Assad, 2011;Kapama, 2014;Kenyunko, 2013;
World Bank, 2012;SFO, 2012;BusinessTimes, 2010;Onyango, 2013;Kassem, 2014).
An important conclusion fromthese studies and fraud theories reveals complexity of the
factors for fraud occurrences and a mixed view regarding factors that are more relevant
than others. This problem is ampliﬁed by little research on businesses in developing
countries. The eventual problem for fraud-ﬁghting professionals is lack of focus in their
efforts to combat fraud. In addition, it is yet to be known whether similar factors are
applicable in the context of businesses in Tanzania. Therefore, thisstudy examines speciﬁc
rationalizations and motivations as well as the occasions that facilitate the occurrences of
both employee and management fraud in business ﬁrms in Tanzania, thereby identifying
the possible deterrentsfor the containment of fraud.
The rest of the paper is organised as follows: Theoretical framework informing the
empirical analysis is provided in the second section. The third sectionprovides brief details
about the context of the study and the description of research methods. The ﬁndings of the
study are presented in the fourth section.The ﬁfth section discusses the emerged ﬁndings in
the light of theoretical frameworkdeveloped earlier. Conclusion ﬁnalises the paper.
A myriad of theories have been put forwardto explain the occurrence of both employee and
management fraud in organisations. Among them, the fraud triangle is the foundation.
However, the paper also provides the criticswith extensions and modiﬁcations to the theory
and their contribution is incorporated when necessary. This theory, pioneered by Cressey
(1950), postulates that, “fraud occurs in the presence of perceived non-sharable ﬁnancial
problem, presence of perceived opportunity and rationalizations that constitute
verbalisations to justify fraudaction in the mind of the fraudster”. According to this theory,