The fraud triangle (pressure, opportunity, rationalisation) is used in assessing fraud risk. The independent auditor is required to assess the risks of material misstatement due to fraud in the financial statements; however, preventing and detecting fraud is primarily the responsibility of management.
Related terms
Fraud investigationA special investigation carried out to establish a suspected irregularity or allegation of fraud with evidence, and to determine its extent and the loss.Forensic accountingThe use of accounting, auditing and investigative techniques to produce evidence for legal disputes and allegations of fraud.Ethics hotlineA channel through which employees and third parties can report suspected irregularities, ethical breaches or fraud, confidentially or anonymously where needed.Segregation of dutiesA fundamental internal control principle requiring that initiating, approving and recording transactions and safeguarding assets be assigned to different people.Compliance auditAn examination of whether an organisation's activities are carried out in accordance with the relevant laws, regulations, contracts or internal rules.Compliance officerThe authorised person responsible for running the compliance programme for the prevention of money laundering and terrorist financing at an obliged entity.
Last updated: October 22, 2026 · This definition is for general information only.