Pressure relates to the employee s actual or perceived need for assets. The pressure need not be real or visible to a third-party observer. These pressures result in the perpetrator having an immediate need for cash or assets. Few people who commit fraud have been known to save or hoard stolen assets. Hence, it is critical for insurance company internal auditors and managers to know and understand their fellow employees and the pressures that prevail.
Opportunity deals with an employee s ability to perpetrate and conceal a fraud.
A lack of proper controls or nonenforcement often promotes opportunity. While insurance company internal auditors cannot regulate the pressure employees feel, they can help mitigate the opportunity to commit fraud. The third element of the fraud model is rationalization. Individuals do not commit fraud unless they can justify it as being consistent with their own personal code of ethics. Personal integrity may be the most important factor in keeping a person from misappropriating assets.