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The Fraud Triangle and Temptation (Part 1)

By sis Bernice Loh


The “Fraud Triangle” is a framework used by anti-fraud professionals and auditors to explain conditions that could motivate individuals to commit fraud.


The three elements of the Fraud Triangle are:

1. Pressure / Motivation;

2. Opportunity; and

3. Rationalization.


The convergence of the three elements of the Fraud Triangle increases the temptation for individuals to commit fraud.


For example, Mary works in a company as a sales manager. Her year-end bonus is dependent on whether she has met the high financial targets set out by upper management (Pressure/Motivation). She realises she is able to fudge the numbers to make it appear as if she has met these targets (Opportunity). She notices that her colleagues engage in similar, unethical behaviour, so she decides that she should do the same to level the playing field (Rationalization). Under such conditions, the temptation for Mary to commit fraud is high.


Companies can apply the fraud triangle to assess if the present conditions predict a higher risk for employee fraud, in which case mitigating steps can be taken to reduce such temptations.


Applying the fraud triangle to our lives may also help us to recognise if there are elements present which increases our risk of succumbing to the temptation to sin, and to allow us to consider ways of mitigating these negative conditions.


1. Motivation / Pressure

As we try to run this Christian race, we will be subjected to all forms of pressure / motivation to commit sin.


The pressure may come externally, from the people around us. Joseph was pressured by Potiphar’s wife to commit fornication. Using her status as the wife of Joseph’s master, she commanded Joseph to lie with her (Genesis 39:7). Despite being rejected by Joseph, she persistently tried to tempt Joseph on a daily basis (Genesis 39:10).


Negative pressures / motivations can also arise internally in us when we allow sinful desires and thoughts to have free reign in our lives, just as how David gave in to his lust when he saw Bathsheba washing herself from afar (2 Samuel 11:2-4). In James 1:14, we know that “every man is tempted when he is drawn away of his own lust, and enticed”.


To reduce negative pressures, companies will modify or remove performance targets that encourage fraudulent behaviour.


Similarly, to reduce our risk of giving in to temptation, we should identify the source of our negative pressure / motivation and determine how best to avoid or mitigate them. For example, Joseph tried to stop Potiphar’s wife by reasoning with her and reminding her that what she wanted to do was a “great wickedness, and sin against God”:


Genesis 39:9 - There is none greater in this house than I; neither hath he kept back any thing from me but thee, because thou art his wife: how then can I do this great wickedness, and sin against God?

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