Let's Check Activity 1. The following are components that contribute to the increasing risk of fraud. Identify whether the item is a component of opportunity, incentive or rationalization, 4. ___epportunity Weak internal controls such as poor separation of duties, lack of supervision, and poor documentation processes. 2 Apoor tone at the top 3. _OPPORTUNITY Poor (inadequate) accounting policies. 4, INCENTIVE . Bonuses that are based on a financial metric creates pressure for employees to meet targets a. oe The need to meet or exceed investor and analyst expectation. Gg, _ ers Personal incentives such as wanting to earn more money, the need to pay personal bills, a gambling addiction, ete. ETonaTO An individual may be spiteful towards their manager or ‘employer and believe that commiting fraud is a way of getting payback. ¢: Se ‘A poor tone at the top caused an individual to follow in the footsteps of those higher in the corporate hierarchy. PATON EATON An individual may believe that they might lose everything (for ‘example, losing a job) unless he or she commits fraud, 10,_RATIONAUZATION An individual stole money from the cash vault claiming that the management has received bigger salaries compared to those employees who have really worked hard for the company.