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Professor Baker
COMM 1311.001
23 March 2015
General Purpose: To inform.
Specific Purpose: To inform my classmates about the harm fraud has on society as well
as the three components of the fraud triangle.
Thesis: An analysis of the motivation behind fraud reveals that there are three critical
components: Pressure, Opportunity, and Rationalization.
Title: The Fraud Triangle
I.
Introduction
A. How big is the problem of internal fraud?
1. The Association of Certified Fraud Examiners' (ACFE)
estimated in 2004 that occupational fraud in the U.S. adds up to
about $660 billion a year (Point For Credit Union Research &
Advice).
2. As the world looked on with disbelief at the magnitude of
corporate fraud of the early 2000s carried out by companies such
as Enron, Tyco, and WorldCom, legislators and accountants took
immediate action towards improving detection and prevention.
B. Learning about the circumstances that lead to fraud is key to come up with
effective preventative action.
[Pause]
Transition: First, lets take a look at the most important factor, pressure.
II.
Transition: The financial pressures of everyday living for all the employees of a company
can of course create a supposed need for them to fraud the company, but having the
opportunity to carry out the fraud is another issue.
Transition: Lastly, the individual uses rationalization in order to continue with the fraud.
III.
Conclusion
A. When the three elements of the fraud triangle, pressure, opportunity, and
rationalization combine, it creates a powerful influence to commit crime.
B. Despite being able to pinpoint where fraud is likely to happen, it is
virtually impossible to stop all fraud, which is where effective training and
auditors come in to save the public from billions lost in stocks and other
investments.
Works Cited
Adapted from Statement on Auditing Standards 99. "Avoiding The Fraud
Mind-Set." Diagram. Strategic Finance 97.2 (2015): 42. Business Source
Complete. Web. 9 Mar. 2015.
Arden, Dale. "Small Business (A Special Report); Inside Jobs: Small-Business Owners
Need to Trust their Employees; Up to a Point." Wall Street Journal, Eastern
edition ed.Apr 30 2007. ProQuest. Web. 7 Mar. 2015.
Boyle, Douglas M., James F. Boyle, and Daniel P. Mahoney. "Avoiding The Fraud
Mind-Set." Strategic Finance 97.2 (2015): 41-46. Business Source Complete.
Web. 9 Mar. 2015.
Buchholz, Alexander K. "SAS 99: Deconstructing The Fraud Triangle And Some
Classroom Suggestions." Journal Of Leadership, Accountability & Ethics 9.2
(2012): 109-118. Business Source Complete. Web. 9 Mar. 2015.
"Internal Fraud Costs About $660 Billion Annually." Point For Credit Union Research &
Advice (2006): 4. Business Source Complete. Web. 21 Mar. 2015.
The Global Economic Crime Survey." (2009): 1-24. PriceWaterhouseCooopers, Nov.
2009. Web. 21 Mar. 2015.