1. What types of people commit fraud?

Studies have shown anyone can commit fraud. Fraud cannot be distinguished by people’s demographic or psychological characteristics. Fraud is committed by people who would consider themselves to be honest and got caught up in a bad situation as a result of pressure, opportunity, and rationalization.

2. What motivates people to commit fraud?

The combination of perceived pressure, rationalization, and opportunity motivates people to commit fraud. The majority of frauds start small as the result of an immediate financial need. After gaining confidence in their fraudulent scheme, the fraud continues to get larger and larger until it is discovered.

3. What is the fraud triangle, and why is it important?

The fraud triangle is comprised of a perceived pressure, a perceived opportunity, and rationalization. The fraud triangle is important because it provides a lens from which to analyze any fraud. Fraud is committed when all three elements of the triangle are present.

4. What is the fraud scale, and how does it relate to pressure, opportunity, and integrity?

The fraud scale is the tie between the elements of the fraud triangle. The greater the opportunity or pressure, the less rationalization it takes to motivate someone to commit fraud. Less opportunity or pressure is needed when the person comitting the fraud is dishonest.

5. What are some different types of pressures?

* financial pressures * vices * work-related pressures * other pressures

6. What are some of the controls that prevent and/or detect fraudulent behavior?

* The Control Environment * The Accounting System * Control Activities

7. What are some common factors that provide opportunities for fraud?

* Lack of controls that prevent and/or detect fraudulent * behavior * Inability to judge quality of