Which of the following situations best illustrates the 'rationalization' factor of the fraud triangle?

• A. An employee believes they deserve a raise and justifies stealing office supplies as compensation.
• B. A cashier notices that there are no security cameras monitoring the cash register.
• C. A manager is under pressure to meet quarterly sales targets and manipulates sales figures.
• D. An accountant is unable to pay personal debts and considers embezzling funds.

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the concept of the 'fraud triangle.' The fraud triangle consists of three factors that contribute to fraudulent behavior: pressure, opportunity, and rationalization. Rationalization refers to the mindset or justification an individual uses to make their fraudulent actions seem acceptable or less unethical.
2. Step 2: Analyze the given options to identify which one aligns with the rationalization factor. Rationalization involves the individual convincing themselves that their actions are justified, often due to perceived unfair treatment or entitlement.
3. Step 3: Evaluate the first option: 'An employee believes they deserve a raise and justifies stealing office supplies as compensation.' This illustrates rationalization because the employee is justifying their theft by believing they are entitled to more compensation.
4. Step 4: Compare the other options to ensure they do not fit the rationalization factor. For example, 'A cashier notices that there are no security cameras monitoring the cash register' aligns with the opportunity factor, and 'A manager is under pressure to meet quarterly sales targets and manipulates sales figures' aligns with the pressure factor.
5. Step 5: Confirm that the correct answer is the first option, as it best illustrates the rationalization factor of the fraud triangle. Rationalization is about the mental justification of unethical actions, which is clearly demonstrated in this scenario.