Fraud Triangle Ethics Case Essay

669 Words3 Pages
Committing fraud, what is it and what does it take to commit fraud? Fraud refers to various offenses that involve dishonesty or fraudulent acts. There are many types of fraud such as securities fraud, bankruptcy fraud, and fraudulent financial statements. In most businesses today, fraud is one of the biggest problems (Beyond, Jack). In most acts of fraud, there are three main circumstances that lead to fraud which has been known as the fraudulent triangle; the incentive, the opportunity, and the rationalization. All of these must be present in order for someone to commit fraud. The first factor in the fraud triangle is the incentive to commit the fraud. The motivation can be anything like financial pressures, high maintenance, family or peer pressure and many more. Sometimes the person feels they are not able to share their financial burden to anyone even if they might understand. In the given case regarding Darren we see the first stage of the fraud triangle. Darren thought that the company might be willing to help him with his financial burden in order to not file bankruptcy, but he did not want to bother them. In reality, Darren was probably ashamed or to pride stricken that he did not want people to find out in the kind of trouble he was in. Soon he found other incentives that kept him from doing the right thing and not taking money from AE&P Inc. He got so greedy with the money; he did not know how to live without the extra income. Darren started living luxurious without actually being able to afford it. This could have been avoided if someone could have observed Darren closer. Opportunity is the second factor in the fraud triangle. The opportunity deals with the ability to commit the fraud without being caught. Some opportunity that may arise when the perpetrator is trying to commit the crime may be lack of supervision, poor internal controls,
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