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ACCOUNTANCY: The fraud triangle.
from BUSINESS LINE, December 11, 2008 Opportunity, pressure, and rationalisation are the three sides to the fraud triangle, states Implementation Guide to Risk-based Audit of Financial Statements (www.icai.org ). When all the three conditions are present, it is highly likely that fraud may be occurring, the publication cautions.
'Opportunity' is present when the organisation has a poor culture and lacks adequate internal control procedures; as a result, the fraudster may go undetected. 'Pressure' which is often generated by immediate needs (such as repaying significant personal debts, or meeting analysts' expectations of profit) may be kept a secret, so watch out. …
