Question

Provide your reason as to why most frauds are committed from employees (enemies within)

Answer 1

most fraud are commited from employees the reason behind this statement is as follows -

1.Time Pressure -If given ample time, an employee might think about their actions as being ethical or not. If under a time constraint, many employees may forget about ‘thinking about their actions’ and just get the job done to please management, ethical or not.

2.Rationalization - Rationalization can come in multiple forms. Sometimes it’s a justification. An employee who hasn’t gotten a raise in 10 years may feel the company owes him or her, so the person commits fraud to try and get the money he or she feels is long overdue.

3.Moment of Opportunities -This is the biggest factor in The Fraud Triangle. Even if a person is under pressure to commit fraud or has rationalized the idea to the point of no return, it’s impossible to commit fraud without having an opportunity to do so.

4.Outside Controls- These controls provide checks and balances to maintain a low risk-fraud environment. They include outside counsel and external auditors. However, they should not be expected to detect or report irregularities out of the scope of their engagement.

5.Attitude – An employee who feels they have been treated unfairly may think that the company owes them something and they have a right to take it. This often occurs when someone doesn’t get a raise or promotion they feel they deserve or when the company starts layoffs and they think they are going to lose their job.