This diagram is a representation of the reasons why people commit fraud and how the
reasons are connected. It is implemented within the analysis of fraud, which depicts
fraudulent activity in accordance with three components. Opportunity, rationalisation, and
pressure.
Opportunity is considered to be the initial component of fraud. This looks at poor
internal controls which make it possible or easier for someone to commit fraud. Typically, a
fraudster will target a perceived weakness within the company. Rationalisation brings us to
the age old question of are people morally good or evil at the end of the day. The fraud
offender will typically attempt to instil a false sense of confidence and security within the
victim or say I will not typically do this illegal act or it’s for a good reason. Pressure is the
final component of the triangle, an overarching component with regard to the undertaking of
fraudulent activity. Pressure could be the need to produce certain results for the company or
pressures from the employee’s personal life.
This is used to assess the risk of fraud by breaking down step-by-step methodology as
to how fraud is committed. The three pieces to the triangle are not only different ways the
fraud could be committed but the synthesis of fraudulent activity. This helps an organization
determine the motives behind an individual’s decision to commit fraud as well as the
This system only works if management is open in sharing information.