Jie Chai (Jessie)
Due Date: Sep.15th
Individual assignment 2
“The Fraud Triangle is a model for explaining the factors that cause someone to commit occupational fraud”; it is widely used within business companies. It consists of three components that, together, lead to fraudulent behavior. Those three factors that must be present at the same time in order for an ordinary person to commit fraud: pressure, opportunity and rationalization. Michael D. Frenza has mentioned it in his article “Fraud perpetrators usually have a non-sharable pressure, they recognize a perceived opportunity, and then they rationalize their actions”.
It is so important for companies to ...view middle of the document...
Company should be rational about employee’s work habits. For example, if one employee’s habit is so different from others, like gambles, drinking or something special. Company should pay more attention to them.
The greatest control company should take is the ability to minimize the opportunity to commit a fraud. If they give opportunity to those people, they will loss a lot. In order to reduce those opportunities, company should arrange more people in control process. Every one in their own positions and takes care of their jobs and responsibility carefully. Therefore, each side can watch the other. Control procedures should ensure that transactions are properly authorized. Also, company should have adequate documents and records and maintain physical control over those internal controls. They also can hire third party and implement a strong system of internal controls to help them fulfill the control to make sure they won’t shelter and benefit from crime.
The organizations should train their employees in a period of time. The most...