The Fraud Triangle Consists Of Three Elements Perceived...

According to (Albrecht 2009) the fraud triangle consist of three elements perceived pressures, perceived opportunity and rationalisation. In the case of Bernie Ebbers and Scott Sullivan there appear to be various factors contributing to each of the elements mentioned in the fraud triangle. Perceived Pressure in this case was due to factors of greed, meeting expectations and to a certain degree, living beyond ones means. (Zekany 2002) describe facts surrounding the saga which indicate how greed played a role in the perceived pressure element. Top executives such as Ebbers and Sullivan, were compensated and rewarded bonuses in connection with a high rate of growth achieved by WorldCom. This alone does not represent greed however coupled with the fact that Ebbers would only approve annual revenue budgets if aggressive targets were reflected suggests his decisions were likely made in light of his self-interests. The pressure to meet expectations increased as a result of WorldComâ€℠¢s high growth marketing combining with a decline in the rate of growth. It can be argued that Ebbers was living beyond his means as declining stock prices may have forced margin calls on his loans that he could not meet, the company itself was existing beyond its means. WorldCom was unable to make its acquisition work as it continued to acquire new companies. The perceived opportunity to commit fraud as (Albrecht 2009) states has various factors three of which are relevant to this case. Lack ofShow MoreRelatedThe Fraud Triangle And Fraud Scale3490 Words   |  14 PagesUse the Fraud Triangle and Fraud Scale to analyse the actions of Bernie Ebbers and Scott Sullivan. What does your analysis suggest? As Albrecht et al. (2012) illustrate, there are many ways to commit fraud but common to all frauds are the following three elements, which make up the fraud triangle: 1. A perceived pressure 2. A perceived opportunity 3. A rationalization of the fraud as acceptable These three elements are almost always present in every fraud and are interactive. This gives rise toRead MoreCase Study148348 Words   |  594 Pagesmini cases or class discussions. Fifteen chapter-end case examples with specific relevance to the content of the chapter and with questions relating to the major learning issues in the chapter. Chapter-end work assignments, which provide further opportunities for student assessment, additional work or self-assessment. Thirty-five case studies (text and cases version only) together with comprehensive teaching notes (in this manual and on the website). The case collection contains a rich mixture of materialRead MoreAcca F7 Answers117326 Words   |  470 Pagesfollowing non-current investments: – 80% of the equity share capital of Silverton at a cost of $13.6 million – 50% of Silverton’s 10% loan notes at par – 1.6 million equity shares in Amok at a cost of $6.25 each. The summarised draft balance sheets of th e three companies at 31 March 2006 are: Non-current assets Property, plant and equipment Investments Current assets Total assets Equity and liabilities Equity Equity shares of $1 each Retained earnings Non-current liabilities 8% loan note 10% loan