Various Types Of Occupational Fraud - 962 Words

Types of Fraud The Association of Certified Fraud Examiners displays what is known as the Fraud Tree. It is a representation of the three major types of occupational fraud (www.acfe.com). Occupational fraud is any scheme that involves employees taking cash, resources, or misapplies assets of the business for their personal gain (www.smartceo.com). Type I: Corruption Corruption is an intentional, dishonest act where an employee abuses their position in the company for personal gain (www.curtin.edu.au). It can take many forms. Bribery is a form of corruption. This is receiving or paying for illegal advantages. An example of bribery is a company official paying a public official to gain advantage over competitors. Embezzlement is another form of corruption. This is when someone has legal access, but not ownership of assets, that steals them for personal gain. For example, the treasurer of the local PTA may decide to take PTA funds to buy her daughter’s prom dress. Conflict of interest is another form of corruption. If the purchasing manager sits on the board of his wife’s company and then awards contracts to her company, that is a conflict of interest. Type II: Asset Misappropriation This is the most common form of occupational fraud and accounts for over 85% of fraud cases. It also usually has the lowest cost of loss. Asset misappropriation is the intentional, illegal use of the company’s assets for one’s personal use (Mohlenhoff Uhl, 2014). An example wouldShow MoreRelatedOccupational Fraud : A Glance At Asset Misappropriation And Other Types Of Organisational Fraud Essay1074 Words   |  5 Pages II. OCCUPATIONAL FRAUD – A glance at Asset Misappropriation and other types of organisational fraud Now that we have tolerably defined ‘fraud’, we can move on to explain ‘Occupational Fraud’ which is an internal fraud i.e. generally committed by employees/members associated with an organisation, and more closely related to corporate governance. 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