Fraud Triangle
The Fraud Triangle is a model that explains why people commit fraud. It consists of three elements: opportunity, pressure, and rationalization. **Opportunity** refers to the ability to commit fraud without getting caught. **Pressure** represents the motivations or stresses that lead someone to consider fraud, such as financial difficulties or personal issues. **Rationalization** is the process by which individuals justify their dishonest actions to themselves, making it seem acceptable. Understanding these elements helps organizations identify risks and implement safeguards to prevent fraudulent behavior.
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The fraud triangle is a model that explains the factors that lead to fraudulent behavior. It consists of three components: **Opportunity**, which refers to the ability to commit fraud without getting caught; **Pressure**, which includes personal or professional stressors, like financial difficulties or job expectations; and **Rationalization**, the mindset that justifies dishonest actions, allowing the individual to see their behavior as acceptable. Understanding this triangle helps organizations identify risks and implement controls to prevent fraud by addressing these underlying factors.