Rakesh Saha, the Chief Financial Officer (CFO) of Sunrise Industries, a prominent manufacturing firm in Mumbai, was under immense pressure to achieve the company's financial objectives. The Board of Directors had establi

Fraud Triangle Overview: Developed by Dr. Donald Ray Cressey from his Ph.D. research on embezzlers ("trust violators"). Based on interviews with 133 imprisoned individuals who misused trusted positions (published in Other People's Money). Excludes habitual offenders; focuses on trusted persons turning to fraud. Hypothesis: Fraud occurs when a trusted person faces a non-shareable financial problem, sees a secret solution via abuse of trust, and justifies it to align with their self-image. Known as the Fraud Triangle: Pressure, Opportunity, Rationalization. Application to Rakesh Saha's Case: Pressure (Motive): Faced intense board expectations to meet aggressive financial targets at Sunrise Industries. Performance evaluation and bonuses tied to success, creating a personal, non-shareable financial strain. Opportunity (Ability): Identified a weakness in internal controls over travel and expense reimbursements during an audit. Allowed discreet manipulation of financial records to inflate profits. Rationalization (Justification): Convinced himself the fraud was a temporary fix benefiting all employees and stakeholders. Believed he could correct the figures next quarter, aligning the act with his moral compass as a short-term necessity. Explanation of the Statement: Fraud requires a motive (Pressure: Rakesh's need to meet targets). An opportunity enables it (Opportunity: weak controls). The fraudster justifies it internally (Rationalization: Rakesh's belief in collective benefit and reversibility). Rakesh's case shows how these elements converge, allowing a trusted person to violate trust while preserving self-image.