Which element of the fraud triangle is most directly related to a business firm's duty to exercise reasonable care to protect its business invitees?

• A. Collusion
• B. Opportunity
• C. Pressure
• D. Rationalization

Answer: (B)

Verified step by step guidance

1. Understand the fraud triangle: The fraud triangle consists of three elements—Pressure, Opportunity, and Rationalization. These elements explain why individuals commit fraud.
2. Define 'Opportunity': Opportunity refers to the circumstances that allow fraud to occur. It is the element that a business can most directly control by implementing strong internal controls and safeguards.
3. Relate 'Opportunity' to the business firm's duty: A business firm's duty to exercise reasonable care to protect its business invitees involves creating an environment where fraud or harm is less likely to occur. This aligns with reducing opportunities for fraud or misconduct.
4. Eliminate other options: 'Pressure' refers to personal or financial stress that motivates fraud, and 'Rationalization' refers to the justification of fraudulent behavior. Neither of these is directly related to the firm's duty to protect invitees.
5. Conclude that 'Opportunity' is the correct answer: By exercising reasonable care, the firm minimizes opportunities for fraud or harm, fulfilling its duty to protect business invitees.