Fraud Triangle And Red Flags - 1485 Words

Option #1 - Fraud Triangle and Red Flags Plutonium entered the Internet start-up boom in 1988. It experienced rapid growth that resulted in a haphazard information technology (IT) system in which pieces of technology were implemented quickly leaving poor integration and data integrity. To strengthen data integrity and create an integrated IT system, the organization installed a billing system, Gateway, which required testing utilizing an imitation yet live credit card number to test the software and integration. Several months after integration, a piracy incident involving a member of the integration team was detected. The incident was resolved with assistance from the Federal Bureau of Investigation (FBI) with the Operations team employee, Chris, warned and suspended with a formal warning letter to be completed. Due to a conversation between the employee and his manager, Jonathan, the letter was not written and months later the behavior of the employee raised suspicions with Jonathan indicating potential fraud. Potential Fraud Indicators – The Fraud Triangle To enable fraudulent activities, three elements comprised of the fraud triangle must exist: perceived pressure, perceived opportunity, and rationalization of the fraudulent activities. In the case of Plutonium, the elements of the fraud triangle were present and several factors increased the opportunities for fraudulent activities. 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