The following are 3 conditions that are present when fraud occurs:
Opportunity - Circumstances can exist which allow fraud. For example, there could be an absence of controls, ineffective controls, or the ability to override controls that can provide an opportunity for fraud to be perpetrated.
Rationalization / Attitude - Those involved in a fraud are able to rationalize a fraudulent act as being consistent with their personal code of ethics. Some individuals possess an attitude, character or set of ethical values that allows them to knowingly and intentionally commit a dishonest act.
Incentive / Pressure - Management or other employees may have an incentive or be under pressure, which provides a motivation to commit fraud.