Understand How The Fraud Triangle Provides The Three Elements Of Computerized Investigation.

Understanding the fraud triangle provides the investigator with the background to properly plan a computerized investigation. The fraud triangle includes three elements that must be present for fraud to occur: (1) a perceived pressure, (2) a perceived opportunity, and (3) rationalization. Maintaining a luxurious lifestyle, or making ends meet are examples of perceived pressures that motivate individuals to commit fraud. Understanding why someone commits fraud enables the investigator to determine the potential fraud’s scope, which could range from hundreds to millions of dollars. The investigator also needs to understand how fraud can be committed and concealed. An individual’s opportunity to commit fraud results from internal controls weaknesses,

King utilized her position as the Sandhogs Union’s employee benefit funds administrator to transfer funds from three benefit funds to pay for her personal expenses and maintain her luxurious lifestyle. During the computerized investigation, the investigator would know to focus on larger transfers between the Sandhogs Union benefit funds and King’s bank account as maintaining a certain lifestyle required a great deal of funds. Due to high levels of trust between King and the Sandhogs Union, the internal controls were lax and she was also granted the authority to sign checks on the trustee’s behalf. Since King was the only administrator handling the benefit funds, she had plenty of opportunities to commit and conceal her embezzlement fraud. The investigator would analyze the Sandhog Union’s internal controls to better understand how King committed and concealed the fraud. Furthermore, the investigator would know to cross-reference amounts from King’s bank statements to withdrawals from the three benefit funds accounts. She rationalized that she either had done nothing wrong or thought that she was not going to get caught. If King’s fraud had been a one-time thing, the computerized investigation would have analyzed records for a specific time period (Buettner 2010) (Bharaha