ACCA Strategic Professional · Strategic Business Leader · Management and internal control systems
At Brennan Pharma, a senior sales manager is under severe pressure to hit bonus targets, believes the firm's pay is unfair, and knows that sales returns are never reviewed independently. Using the fraud triangle, which element is represented by the lack of independent review of sales returns?
It represents opportunity. Opportunity arises when controls are weak or absent, and no independent review of sales returns means fraud could go undetected. Bonus pressure is the incentive and the sense of unfair pay is rationalisation.
- AOpportunityCorrect
- BPressure
- CRationalisation
- DCapability
Explanation
The fraud triangle has pressure (incentive), opportunity and rationalisation. Bonus targets are pressure, the belief that pay is unfair is rationalisation, and the unreviewed returns are weak controls that give opportunity. Capability belongs to the fraud diamond, not the triangle.
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