WEEK 2: FRAUD: INSIDE VERSUS OUTSIDE JOBS

 The Fraud Triangle and Hacking

The fraud triangle exists when three elements are in place at a business – opportunity, pressure, and rationalization.  Opportunity for fraud is usually present in organizations with weak (or few) internal controls.  Pressure to commit fraud may come from outside sources (i.e. the boss wants to make sure EPS meets investor expectations) or could be internally driven (i.e. a person that has personal financial troubles).  Once these first two elements are in place, a fraudster will commit fraud if they can rationalize it to themselves.

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