Various Types Of Occupational Fraud

962 Words Aug 18th, 2016 4 Pages
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 would…
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