Maxwell Case Revised 
1) Anna Thomas committed a fraudulent act by making personal charges and cash withdrawals on Rusher Automotive’s credit card. The accounting profession believes there are three conditions necessary for fraudulent behavior. (See Statement on Auditing Standards No. 99, Consideration of Fraud in a Financial Statement Audit. For additional explanation, you may want to review Buckhoff [2001].)
a) List the three elements and discuss how each of these elements is present in Anna Thomas’ fraud at Rusher Automotive.
Element of Pressure demonstrated through financial pressures, vice pressures, and work-related pressures.
“The first leg of the fraud triangle represents pressure. This is what motivates the crime in the first place. The individual has some financial problem that he is unable to solve through legitimate means so he begins to consider committing an illegal act…” (ACFE The Fraud Triangle)
For Anna, financial pressures were evident. She was driven by money, or the lack thereof, in her sales job to go back to school. She put herself through school, raised her children, and took care of her husband on disability. The husband was not able to contribute to the household income, other than his disability checks. She felt the pressure to provide for her household, while also affording her new car. Anna often spoke of money when she finally achieved her position with the Maxwell & Co. because she felt other CPAs were making more than her.
Anna felt pressure, as well, to be a respected individual. She came from a father that was very well known and respected as an attorney and held herself to the same standards.
Element of Opportunity
“The second leg of the fraud triangle is perceived opportunity, which defines the method by which the crime can be committed.” (ACFE The Fraud Triangle)
The opportunity for Anna only really existed with Rusher Automotive. She was assigned to the bookkeeping task, and was only supervised for a few months. Once she had the trust from her
a) List the three elements and discuss how each of these elements is present in Anna Thomas’ fraud at Rusher Automotive.
Element of Pressure demonstrated through financial pressures, vice pressures, and work-related pressures.
“The first leg of the fraud triangle represents pressure. This is what motivates the crime in the first place. The individual has some financial problem that he is unable to solve through legitimate means so he begins to consider committing an illegal act…” (ACFE The Fraud Triangle)
For Anna, financial pressures were evident. She was driven by money, or the lack thereof, in her sales job to go back to school. She put herself through school, raised her children, and took care of her husband on disability. The husband was not able to contribute to the household income, other than his disability checks. She felt the pressure to provide for her household, while also affording her new car. Anna often spoke of money when she finally achieved her position with the Maxwell & Co. because she felt other CPAs were making more than her.
Anna felt pressure, as well, to be a respected individual. She came from a father that was very well known and respected as an attorney and held herself to the same standards.
Element of Opportunity
“The second leg of the fraud triangle is perceived opportunity, which defines the method by which the crime can be committed.” (ACFE The Fraud Triangle)
The opportunity for Anna only really existed with Rusher Automotive. She was assigned to the bookkeeping task, and was only supervised for a few months. Once she had the trust from her
References: Albrecht, Steve W. 2014. Fraud Magazine. Iconic Fraud Triangle Endures: Metaphor Diagram Helps Everybody Understand Fraud. Accessed at the Fraud Magazine’s website (March 6, 2014): http://www.fraud-magazine.com/article.aspx?id=4294983342 American Institute of Certified Public Accountants (AICPA). 2015. Statements on Auditing Standards. Accessed at AICPA web site (March 6, 2015): http://www.aicpa.org/research/standards/auditattest/pages/sas.aspx Association of Certified Fraud Examiners (ACFE). 2015. The Fraud Triangle. Accessed at ACFE Web site (March 6, 2015): http://www.acfe.com/fraud-triangle.aspx Public Company Accounting Oversight Board (PCAOB). 2015. Consideration of Fraud in a Financial Statement Audit. Auditing Standard No. 316. Accessed at PCAOB Web site (March 6, 2015): http://pcaobus.org/Standards/Auditing/pages/au316.aspx#ps-pcaob_b4cff962-2515-4a2e-9232-fab0b1c42eae