Fraud is a deliberate action by individual or entity to cheat another, causing damage. There is a good chance of committing frauds in every business where there are people involved. To avoid them is an important duty that every manager must carry out.
In order to carry out that task, firstly, managers must perfectly know the causal factorsthat should be removed to avoid fraud. These causal factors are described in the “Fraud Triangle”, which describes the three factors that are present in every situation or fraud, which are:
This factor refers to the need of committing fraud. This need can be related to money or other features. From my point of view, pressure is the most important causal factor that is present inevery situation or fraud. I think that it is the causal factor that primarily leads to the situation of fraud.
In that sense, as it is logical, pressure is the causal factor that primarily appears in the text that we are analyzing since, as we can notice, in that text we can find all of sorts of pressures that compose the causal factor.
These types of pressures are the following:- Financial pressures
Financial pressures refers to common financial pressures, such as greed, living beyond one’s means, high bills, personal debt, poor credit, personal financial losses and unexpected financial needs.
Although, at first sight, it seems that Helen does not have the common financial pressures I have given. But the text mentions that Helen and her husband havethree children and that the oldest child has learning problems due to his hyperactive behavior. In fact, they had tried several different schools. Likewise, the text says that the second child has diabetes. Therefore, I believe that is quite clear that Helen has a lot of high bills and unexpected financial needs due to the illnesses of two of her children.
- Vices pressures
Vicespressures refer to the worse kind of pressures to commit fraud, such as gambling, drugs, alcohol and expensive extramarital relationships. Helen's husband has a substance abuse problem, so it is probable that this problem creates unexpected financial needs to the family.
- Work-related pressures
Work-related pressures are motivated by getting little recognition, feeling jobdissatisfaction, fear of losing one’s job, being overlooked for a promotion and feeling underpaid, among others.
The text mentions that Helen has complained to her co-workers about being underpaid. So, in my opinion, it is quite clear that work-related pressures are another causal factor that appears in the text.
- Other pressures, such as husbands pressures (husbands lifestyle demands), lifepressures (family crisis) and social pressures (“being successful”), among others.
I do not think we can find any of these examples of pressures in the text we are analyzing.
It refers to the mindset of the fraudster that justifies them to commit fraud. I think it is an important factor since it lets people commit frauds without feeling guilty. This factorappears in the text when Helen says to Juan that things have been pretty tight at her home with medical expenses. I believe that this statement is a justification that Helen uses to justify herself of the fraud that she is committing.
This factor refers to the situation that enables fraud to occur, often when internal controls are weak or nonexistent. Six major factorsthat increase opportunity are: lack of controls, inability to judge performance quality, fails to discipline fraudsters, lack of access to information, ignorance, apathy and incapacity and lack of audit trail.
After the causal factor “pressure”, I think it is the most important factor to commit fraud, since it is necessary to be successful. As Juan himself admits, internal controls of his...