Understanding the Three Legs of Cressey's Fraud Triangle
Question
In Cressey's fraud triangle, its three of the legs are Opportunity, Pressure and
Answers
Explanations
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A. B. C. D.C
Cressey's fraud triangle is a widely used model in fraud prevention and detection, developed by criminologist Donald Cressey in the 1950s. The model explains the three key factors that must be present for a person to commit fraud. The three sides of the fraud triangle are Opportunity, Pressure, and Rationalization.
Opportunity: The first side of the fraud triangle is opportunity, which refers to the circumstances or conditions that allow an individual to commit fraud. It includes access to assets, lack of oversight or control, weak internal controls, and inadequate monitoring. In other words, if an individual has access to assets or funds and can find a way to exploit a weakness in the system, the opportunity for fraud is present.
Pressure: The second side of the fraud triangle is pressure, which refers to the motivation or incentive for someone to commit fraud. Financial pressures, such as debt, addiction, or personal financial problems, are common causes of pressure that can lead individuals to engage in fraudulent activity.
Rationalization: The third side of the fraud triangle is rationalization, which refers to the mental process that allows an individual to justify their fraudulent actions. Rationalization can take many forms, such as convincing oneself that the fraud is necessary, justified, or will be repaid, or blaming others for the situation.
Therefore, the correct answer to the question is C. Rationalization.
