Management of Premium Discovery Company is compensated through large salaries, stock options, and bonuses tied to the company's working capital growth. The CEO is constantly holding meetings to ensure that management is on target for increased operating income each month. Based solely on the preceding information, which element of the fraud triangle exists at the Premium Discovery Company?

Incentive/Pressure.

Explanation:

The fraud triangle is a model that describes factors which motivates people to commit fraud. Usually all these factors come into play before a fraud is committed.

The three elements of the fraud triangle are opportunity, pressure or incentive, and rationalisation.

The incentive in the given scenario is the compensation through large salaries, stock options, and bonuses tied to the company's working capital growth provided the management of Premium Discovery company.

This pressure or incentive drives the CEO to hold meetings to ensure management is on track to increase operating income each month.

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