Control environment
Definition
The set of organisational policies, procedures, and cultural attitudes that collectively determine how much opportunity a fraudster has. Weak controls, missing segregation of duties, and absent oversight directly create opportunity.
Related terms
- Fraud diamond
- The four-element extension of the fraud triangle proposed by Wolfe and Hermanson (2004), adding capability to pressure, opportunity, and rationalization. Capability focuses...
- Management override
- The capacity of senior management to circumvent controls they themselves designed or approved, a particularly dangerous form of opportunity that audit and...
- Non-shareable financial problem
- Cressey's original phrase for what is now called pressure or incentive. The problem is non-shareable because the person believes they cannot disclose...
- Occupational fraud
- The use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the employing organisation's resources or assets. Cressey's...
- Rationalization
- The internal justification that allows a person to commit fraud while maintaining a self-image as an honest individual. Common forms include 'I...
Explained in
- The Fraud Triangle and Cressey's ModelThe set of organisational policies, procedures, and cultural attitudes that collectively determine how much opportunity a fraudster has. Weak controls, missing...