The fraud triangle conditions necessary for financial statement fraud to occur are the existence of a system of internal control,the ability to invade the system,and rationalization to commit the fraud.

Fraud Triangle

A theoretical model that asserts three factors must be present for an individual to commit fraud: motivation, opportunity, and rationalization.

Financial Statement Fraud

The intentional misrepresentation or omission of data in a company's financial reports, done to mislead users of those statements.