Question

policies
current attempt in progress
match each situation with the fraud triangle factor (opportunity, financial pressure, or rationalization) that best describes it.
a. an employees monthly credit card payments are nearly 75% of their monthly earnings.
b. an employee earns minimum wage at a firm that has reported record earnings for each of the last five years.
c. an employee has an expensive gambling habit.
d. an employee has check - writing and - signing responsibilities for a small company, and is also responsible for reconciling the bank account.

Explanation:

• a. The employee has high credit - card payments relative to earnings. This creates a financial burden, which is a form of financial pressure.
• b. The employee may feel that they are not being fairly compensated (since the firm has record earnings but they earn minimum wage). This can lead to a rationalization that they deserve more, perhaps by unethical means.
• c. An expensive gambling habit creates a financial need (to fund the habit). This is a form of financial pressure.
• d. The employee has control over check - writing, signing, and bank reconciliation. This lack of segregation of duties gives the employee the opportunity to commit fraud (e.g., write unauthorized checks and cover it up during reconciliation).

Answer:

a. Financial pressure
b. Rationalization
c. Financial pressure
d. Opportunity