Kim Smith CFO was a very private person who did not socialise with colleagues. Kim used to tell her co-workers that she had no time to attend work functions because she was too busy looking after her frail mother and children after work and on her days off, including holidays. Kim also had some debt issues after making some bad investment decisions. A digital analysis of the accounts payable of her company reveals that four of the companys suppliers have cheques sent to two post office boxes at the same post office. After further investigations you discover that one post office box is registered under the same name as the CFOs son, aged 10 and another is registered under the same name as the CFOs daughter, aged 6. After searching through documentation of supplier transactions, you suspect that Kim is sending company cheques to the post office boxes of fictitious suppliers which she collects and somehow deposits into her account. As you are under pressure to meet other deadlines and wish to wrap up this investigation quickly, you ask Kim to attend your office for an interview. When she arrives at your office, you present to her your suspicions. Kim quickly becomes upset, protests her innocence and storms out of your office. Months later Kim Smith pleaded guilty to numerous charges of theft and was sentenced to three years jail.

REQUIRED:

(a) What is the fraud triangle? Carefully explain.

(b) Use the fraud triangle to analyse the fraud committed by Kim Smith.