Consideration of Fraud within Small Business Organizations

Introduction
In recent studies made by Klynveld, Peat, Marwick and Goerdeler, LLC (KPMG), Fraud and
Misconduct survey 2010 shows “The value of frauds committed by employees has double during the past two years with the average case now costing victims $3 million. The survey found that 61% of cases, there was no recovery of cash stolen, and that the average time to detect major fraud has increased from 342 days to 399 days. It also confirms the traditional profile of the average fraudster: a 38-year old male, who has been with a business for several years and holds a management position”.
This paper analyzes and examines the three elements of the fraud triangle, including it’s characteristics, symptoms, and fraud prevention programs according to the case scenario.
The fraud triangle theory was first accredited to Donald R. Cressey, integrating the three elements that must be present for occupational fraud.
*Perceived Pressure
*Perceived Opportunity
*Rationalization

According to the Association of Certified Fraud Examiners (ACFE), “Fraud encompasses a range of irregularities and illegal acts characterized by intentional deception or misrepresentation, which an individual knows to be false or does nor believe to be true.
Further, fraud is perpetrated by a person knowing that it could result in some unauthorized benefit to him or her, to the organization, or to another person, and can be perpetrated by persons outside and inside the organization”.
Case scenario
Plutonium an internet start-up company, developed its technological systems necessary to support the rapidly expanding user base. However, many of their systems had been added hastily, resulting in poor integration and eroding data integrity. Therefore, CEO of Plutonium announced an initiative to integrate all