Which of the following is least likely a condition present in a "fraud triangle" (Opportunity-Motivation-Rationalization)?

A. Constraining debt covenants
B. Adding independent members to the board of directors
C. Management's belief that a decline in performance is due to temporary economic conditions

Correct Answer: B

The "fraud triangle" requires incentives (e.g., debt covenants), opportunities, and management's ability to rationalize (temporary economic conditions). Adding independent members to the board of directors should improve corporate governance and hence decrease the opportunity for fraud.