Classification of Fraud Cases

1382 Words Jan 25th, 2018 6 Pages
Frauds are word that has many definitions. Fraud is defined in Webster’s New World Dictionary as “international deception to cause a person to give up property or some lawful right” (International Journal of Business and Social Science, 2011) Besides, fraud is defined in Black’s Law Dictionary as “a knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment” in 2004. There has distribution of losses more than $1,000,000 in 2012 which is 20.6%. Moreover, 55.5% of distribution of losses is less than $200,000 in 2012. (See pg.21 Appendix 3)

Findings and discussions
(a) Fraud Tree
According to book of Fraud Auditing and Forensic Accounting, Association of Certified Fraud Examiners (ACFE) has offered a unified professional fraud classifier in 2010, and this known as “Fraud Tree” for classifying frauds. (See pg.20 Appendix 1) It categorizes the individual fraud schemes into some classification model of categories, subcategories, and micro categories. Furthermore, there have three main categories consist of asset misappropriation fraud, corruption and fraudulent financial reporting. Besides, each category of fraud has unique characteristics. (See pg.21 Appendix 2) The 2012 Report to the Nations on Occupational Fraud and Abuse analysed 1,388…

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