What Olympic Swimming Can Teach Us About Rationalization & Fraud Prevention

Several nights ago, I watched Olympic swimming with my 19-year-old son. I saw Lilly King claim the 100-meter breaststroke gold medal over Russian rival Yulia Efimova. Efimova gained notoriety in the 2016 Olympics for participating in various swimming events, despite serving a 16-month suspension due to testing positive for steroids. She also tested positive for meldonium earlier this year.

During her post-race interview, King said, “I’m proud to be competing clean and doing what is right.” My son—as he frequently does when he disagrees with a comment—shook his head, rolled his eyes and said, “Sure she’s clean. Every one of the athletes is cheating and taking something.” My son is something of a cynic.

His statement gave me pause and made me think about rationalization and how it fits with the fraud investigations my group performs. One cornerstone of fraud theory is the “Fraud Triangle,” which theorizes that, for a fraud to occur, three elements must be present:

  1. A perceived need or financial pressure facing an individual
  2. A perceived opportunity to commit fraud
  3. The individual’s ability to rationalize or justify fraudulent behavior

In a sporting event, rationalization is often useful. If sprinters have a bad race, they might rationalize their performance by telling themselves, “It was a bad race because I hesitated coming off the blocks and had a slow start. I won’t try to anticipate the starting gun next time, and I’ll have a better race.” This kind of rationalization allows the sprinter to justify a poor performance—it isn’t that the sprinter can’t compete, it’s just a mistake in executing the race strategy—and sets the stage for a better performance in the next event.

However, rationalization also can be destructive. What if a sprinter has a bad race and thinks, “I lost because everyone else is ‘juicing’ (using performance-enhancing drugs). The only way I can win is if I juice too.” The sprinter has now justified behavior that’s against the sport’s rules, not to mention potentially illegal.

Similarly, fraud perpetrators often justify their behavior by blaming their circumstances, their organization, their co-workers or myriad other factors. Common rationalization for fraud includes:

  • I should have gotten a promotion years ago. If I’d been promoted, I’d be making more money today. The company OWES ME.
  • Everyone in my department steals from the company. Why should I be left out?
  • I’ll just “borrow” from the company. I’ll pay it back before anyone notices.
  • I have to take this money to pay for . But it’s a ONE-TIME thing, I’ll never do this again.
  • I’m not a bad person. I’m not a thief. I just can’t catch a break.

In each example, the individuals were able to rationalize their behavior, place blame for their actions on outside factors and externalize responsibility. They’re just like the sprinter who justified using performance-enhancing drugs by thinking, “Everyone’s doing it.”

As part of their fraud prevention efforts, companies should strive to recognize comments and attitudes similar to the examples above. These attitudes may indicate an employee found a way to justify fraud and might be seeking an opportunity to commit a crime. However, by being aware of these attitudes, addressing them head-on and implementing internal controls that can detect fraud in a timely manner, companies can help keep themselves out of hot water.


Rand provides business valuation services, forensic accounting, economic damage analysis, fraud auditing and bankruptcy and restructuring services, including serving as an expert witness. He also performs valuations for transactions and restructurings and economic analyses of damage resulting from business interruption and breach of contract.

Rand Gambrell – who has written posts on BKD Forensics.

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