Describe the factors that constitute the fraud triangle. Why is it important to auditors?
The fraud triangle consists of three factors that contribute to or are associated with man-agement and employee fraud. These are:
(1) situational pressure, which includes personal or job related stresses that could coerce an individual to act dishonestly;
(2) opportunity, which involves direct access to assets and/or access to information that controls assets, and;
(3) ethics, which pertains to one's character and degree of moral opposition to acts of disho-nesty.
An individual with a high level of personal ethics, who is confronted by low pressure and limited opportunity to commit fraud, is more likely to behave honestly than one with weaker personal ethics, who is under high pressure and exposed to greater fraud opportunities.
Research by forensic experts and academics has shown that the auditor's evaluation of fraud is enhanced when the fraud triangle factors are considered.
You might also like to view...
When using the spreadsheet (work sheet) method to analyzing noncash accounts, no order of analysis is required,but it is more efficient to start with Retained Earnings and proceed upward in the account listing
a. True b. False Indicate whether the statement is true or false
The corporate alternative minimum tax was designed to insure that corporations with substantial economic income paid their fair share of the federal tax burden.
Answer the following statement true (T) or false (F)
One of the functions performed by a PR department is ________, which involves building and maintaining relations with legislators and government officials to influence legislation and regulation
A) direct marketing B) press relations management C) investor relations management D) lobbying E) public affairs management
What role does trust play in building relationships where we grant people the opportunity to have influence in our life?
What will be an ideal response?