Question

“According to the fraud triangle, if an employee both perceives pressure (has a need) and perceives an opportunity to commit fraud, it is very likely that employee fraud will occur.” Is this statement true or false? Explain

Answer 1

Fraud Traingle

The fraud triangle theory is designed to evaluate the reasons behind the fraud committed by workers at workplace.
The fraud is often white collar crime but not always.
The fraud triangle theory States three stages that affects the worker to commit fraud.

1.   Pressure on individual
2. Opportunity to commit fraud
3. Rationalization

1. Pressure: when workers are facing personal financial pressures in their personal life and the worker finds these problems to be unsolvable by the earnings they are making through their job or other means. Thier is a pressure to fulfill needs on workers.

Example of such debts is : Gambling debt.

2. Opportunity : It means a chance with worker to commit fraud within the organisation.
When their is an opportunity with the worker in clear course of action to defraud organisation and such frauf will not be easily disclosed.
And also, the ability to abstract finance from the place secretly is a key to frauds.

3. Rationalisation: When the fraud done by the worker is justifiable by them to their internal moral.
Many times, the frauders are not seeing themselves as criminals and are victim of circumstances.
Rationals are based on certain factors such as need to look after their family or job dissatisfaction from the income being earned.

After the above discussion, it can be concluded that, fraud is obvious cause of pressure and opportunity to commit fraud on employees.

Therefore, the statement that "if an employee has an perceived pressure and preceive opportunity to commit fraud, it is very likely that employee fraud will occur" is true.