Question

Write in your own words what is fraud as per Accounting Information System andEx- plain Fraud triangle as per Accounting Information Systems. ( long answer please)

Answer 1

Answer)

Fraud as per accounting information system is that using companies accounting data for gaining some illegal benefits from it which may be fradulent payments or misappropriation of organisation money by suppressing the receipts or using such data for the benefits of external entities.

Fraud triangle is the concept that explains the scenarios which increases the likeness of committing a fraud in an organisations. The three scenarios are explained below:

1) Perceived pressure:

This means the pressure that forces a person to commit the fraud like repayment of debts, lavish living, real necessity like health problems etc which need money to solve them and this will be a source for funding such person to fulfill his needs or wishes. Even sometimes although it begin as needs most of the this latter trigger as more expectations where this source creates lavish dreams in them.

2) Opportunity:

Although needs makes people commit fraud, weak controls also motivates a person to involve in a fraud. This may give confidence for a person in need or even creates desire in those who have no big dreams till then.

3) Rationalism:

Rationalism is nothing but Justification which a person thinks as an reason for committing the fraud and feels justified. For example a person may think he is just pending some money or he is not rewarded for his hard work etc which is must for a person for involving in a fraud without which he can't do that.