Have you ever heard of the fraud triangle?

The fraud triangle is a visual way of thinking about the three factors that group together to lead to fraudulent behavior.

The three factors that combine to create the perfect circumstances for fraud are

1. Motivation

2. Opportunity

3. Rationalization


Motivation is the force driving an employee to commit fraud, such as personal financial stress.
Opportunity is the environment in which someone believes that it will be difficult to be caught committing fraud.  If they do not get caught, they will likely continue to seize the opportunity.
Rationalization is the means of justifying the act.  They may rationalize their behavior by feeling that they are just “borrowing” the funds and will pay it back.
Next week, find out how you can prevent motivation, opportunity, and rationalization from turning into fraud.



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