Fraud Awareness

We have to undergo elearning on fraud awareness. We do not need the experts to tell us that fraud stems from greed. The fraud triangle model which says that for fraud to occur, three elements have to be present ie pressure, opportunity and rationalisation.

Pressure
It is sometimes labelled as motive or incentive that leads a fraudster into engaging into misconduct. Generally the factors are related to financial needs. There are various reasons that push the fraudster into commmitting fraud such as job insecurity, difficult economic environment and peer pressure.

Opportunity
This often arises from the organisation's poor internal controls. The fraudster will capitalize on the weak management and lack of internal controls. In order to circumvent this, organisations should tighten their proceseses and procedures ie to plug any loopholes if any

Rationalisation
The perpetrators are able to rationalise their actions by convincing themselves that they are underpaid and they are only taking what is due to them. The perpetrators are just finding justification for their action.

Something for sharing.