Question 6From an investigatory perspective, the shortcoming ofthe fraud triangle is as follows:1 pointThe fraud triangle doesn’t help the investigatorunderstand the motivations of the fraudster.The fraud triangle doesn’t help the investigator understand why thefraudster committed fraud.Pressure and rationalization are generally notobservable.The fraud triangle is as important to an investigation as any othertool
Question
Question 6From an investigatory perspective, the shortcoming ofthe fraud triangle is as follows:1 pointThe fraud triangle doesn’t help the investigatorunderstand the motivations of the fraudster.The fraud triangle doesn’t help the investigator understand why thefraudster committed fraud.Pressure and rationalization are generally notobservable.The fraud triangle is as important to an investigation as any othertool
Solution
The main shortcoming of the fraud triangle from an investigatory perspective is that pressure and rationalization, two of the three components of the fraud triangle, are generally not observable. This means that while the fraud triangle can provide a theoretical framework for understanding why fraud occurs, it may not provide concrete, observable evidence that can be used in an investigation.
The fraud triangle is based on three factors that are present in every fraud: pressure, opportunity, and rationalization. Pressure is the motivation for committing the fraud, opportunity is the situation that allows the fraud to occur, and rationalization is the process by which the fraudster justifies their actions.
While opportunity is often observable and measurable, pressure and rationalization are internal processes that occur within the mind of the fraudster. These factors can be difficult, if not impossible, to observe directly. Therefore, while the fraud triangle can be a useful tool for understanding the factors that lead to fraud, it may not always be helpful in the practical aspects of an investigation.
In conclusion, the fraud triangle is as important to an investigation as any other tool, but it has its limitations, particularly when it comes to understanding the motivations and justifications of the fraudster.
Similar Questions
Question 3With regard to predatory fraudsters, which of thefollowing statements is correct?1 pointThe fundamental premise of the Fraud Triangle suggests that when an ordinaryperson, or predatory fraudster, commits fraud, all three of the legs of thetriangle must be present.Predators spend their time and energy looking for opportunities tocommit fraud.The fundamental premise of the Fraud Triangle suggeststhat when an ordinary person, or accidental fraudster, commits fraud, all threeof the legs of the triangle must be present.Predatory fraudsters are good at creating elaborate excuses orrationalizations for their conduct.
It has been argued in the literature that “the fraud triangle and its three stages (categorised by the effect on the individual) of (1) pressure, (2) opportunity and (3) rationalisation” can be improved by considering which ‘fourth element’: Group of answer choicesEaseNone of the available answersWealthGreedCapability
Which of the following is not one of the components of the fraud triangle?Multiple choice question.DishonestyRationalizationOpportunityPressure
Question 8To improve the effectiveness of the fraud triangle, Wolfe and Hermanson suggests which characteristic as an addition to the fraud triangle?1 pointCapabilityCapacity to steal IntegrityEgo or entitlement.9.Question 9With regard to segregation of duties, which of the following is not oneof the four major functions1 pointauthorizingcorrectingrecordingsafeguarding10.Question 10
Opportunity, Financial Pressure, and Rationalization are the three main factors contribute to fraud activity. In your view, discuss the factor that you believe is the most crucial to creating a fraud. Provide examples to support your conclusion and defend your choice in the discussion.
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