How The Three Elements Of The Fraud Triangle Were Present In Helen's Case

1. The three aspects of fraud - Perceived pressure, Rationalization, and Opportunity were present in the CIT case as follows:

This story fits into Fraud Triangle Theory because Pavlo was feeling pressurized to manage his financial problems. He was also pressurized to do well while dealing with clients to recover money for the company. Another thing was that he was seeing corruption being done all around him.

(TCO 5) Fraud is an intentional misrepresentation of facts, made for the purpose of persuading another party to act in a way that causes injury or damage to that party. In our readings and discussions we have seen several examples of fraud in business. Using that experience (1) provide an example of a common fraudulent practice in business with an explanation of how the practice works and (2) name and describe each of the elements of the Fraud Triangle.

On August 25th 2015 Co-Founder of OXYwater Preston J. Harrison and his Wife Lovena Harrison were sentenced for Wire Fraud, Money Laundering and Tax Crimes. (Investor Claims, August 2015). I chose this case because it has many different types of fraud, including wire fraud, money laundering, and tax fraud, conspiracy to commit fraud, concealment of fraud, theft and misappropriation of funds. What makes this case so interesting is that the husband and wife co-owners of OXYwater are not the only criminals. Their co-conspirator was Thomas E. Jackson;

It is important to first gain an understanding of the various types of fraud, in order to aid understanding in regards to the prevention of fraudulent activity. This paper begins with a review of the definition of financial fraud, and identification of the different fraud types. Further, included is an examination of what motivates individuals to commit fraud, including an identification of some of the method in which people commit fraud. A discussion of the importance of the fraud triangle, and how rationalization contributes to fraud is a key area of focus. Finally, there is an examination of some controls that prevent and detect fraudulent behavior, including the value and importance of understanding the nature of fraud for

The case of Sacco and Vanzetti, two italian anarchists took place in 1920. They were “falsely” convicted of robbing a paymaster and killing the guard. They bonded over their ideal of anarchism and used violence to fight against violent and unjust governments. Their case caused extreme tension between immigrants and American people. Thousands of people around the world were devastated by this case and began to speak up. Although their innocence was supported by many people, Sacco and Vanzetti were executed off of deceptive evidence. This increased the amount of hatred Italian immigrants had against Americans.

Dixon, Illinois is a small town of about 16,000 people (US Census, 2015) located approximately 100 miles southwest of Chicago. Until 2012, Dixon’s claim to fame was being the town where, 40th President of the United States of America, Ronald Reagan grew up (City of Dixon). Today, in addition to hosting a future president for 22 years (City of Dixon), Dixon, IL is known as the location of the largest and longest municipal fraud in United States history (Mathieson, 2014). This paper will examine the main players in the fraud; how the fraud was carried out; the laws and procedures violated; the impact of the fraud; and the measures that could have been taken to prevent it.

Read the sections “Audit Programs” & “Audit Procedures for Obtaining Audit Evidence” in Ch. 3 of Auditing & Assurance Services.

Fraud is an issue that causes major scandals, although it is a very ancient scheme. Recent fraud events gave light to gaps that facilitated its events. Its extent was drastic by affecting financial markets that eventually trickled into global markets. Major organizations and countries worked cohesively and continue to address the gaps and, in effect, implemented strict compliance regulations to diminish and refrain fraudulent activities. Strict compliance regulations are examples of a fraud response plan the small family business could have implemented to refrain the perpetrators from fraudulent incidents, protect organizational assets and the organization’s going concern.

There are many reasons to why fraud could have been done without notice and attention during this time period.

Some industry-specific factors, such as having valuable near-cash assets, can increase the organization's vulnerability. Also they will need to rationalize the actions as justifiable. The individuals committing the fraud must first convince themselves that their behavior is acceptable or will be temporary. For example, Barry Minkow’s believed that the lies and deceit are for the betterment of his company and that with time everything will eventually return to normal.

The second part is opportunity. The opportunity to commit fraud usually arises through weak internal controls.

a) List the three elements and discuss how each of these elements is present in Anna Thomas’ fraud at Rusher Automotive.

These elements are interrelated in order for fraud to be committed in an organization and every corporate executives needs to understand this theory to enable them know how and why employees perpetrate fraud. Diagram below describe the element and how they are interrelated.

Essentially, all three elements of the fraud triangle must be present for fraud to be committed: pressure, opportunity, and rationalization. Additionally, nine factors provided the atmosphere for the perfect fraud storm of 2000 through 2002. The nine factors included: economy, moral values, incentives, expectations, debt, accounting rules, auditor dependence, greed, and educator failures (Albrecht et al., 2012). When combined with the elements of the fraud triangle these factors enabled organizations such as Enron and WorldCom to commit the fraudulent activities that resulted in this perfect storm.