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ACCA Strategic Professional · Strategic Business Leader · Identification, assessment and measurement of risk

At Calderon Logistics, the accounts payable clerk can set up new suppliers, approve invoices and release payments. Management has found several payments to an unfamiliar supplier with a mailbox address. Which fraud risk factor from the fraud triangle best explains why this fraud was feasible?

Opportunity best explains it. One clerk could create suppliers, approve invoices and release payments, so there was no segregation of duties to prevent or detect false payments. Pressure and rationalisation concern the fraudster's mindset, which the scenario does not describe.

  1. AOpportunity, created by weak segregation of duties and control over paymentsCorrect
  2. BPressure, because the clerk may have personal financial difficulties
  3. CRationalisation, because the clerk may believe the company owes them more pay
  4. DMotivation, because bonuses depend on reported profit

Explanation

The facts given concern the control environment: one person controls the entire payment cycle. That is the opportunity element of the fraud triangle. Pressure and rationalisation concern the individual's mindset, and nothing in the scenario describes them.

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