Answer
The fraud triangle describes three conditions generally present when fraud occurs: incentive/pressure (a reason to commit fraud, e.g., targets, personal debt), opportunity (a way to do it, e.g., weak controls or override ability), and rationalization/attitude (justifying the act). Auditors use it to identify fraud risk factors during risk assessment.
Fraud triangle: Incentive/Pressure + Opportunity + Rationalization.Real-world example Aggressive bonus targets (pressure), weak controls (opportunity), and a 'everyone does it' attitude (rationalization) flag high fraud risk.