Types Of Fraud
A way that some people clasiffy fraud ist to divide frauds into those committed againts organzatins and those committed on behald of organization.
In employee fraud for example- fraid committed againts an organization- the victim of fraud is the employee`s organization. On the other hand with financial statement fraud for example executives ussualy commit fraud on behalf of an organization ussually to make its reported financial result look etter than they actually were. In this casa the executives of a company ussualy benefit because a company`s stock price increases or remains artificially high and the victims are investors in the company`s stock. Sometimes executives misstate earnings in order to ensure a larger year end bonus. Financial statement fraud often occurs in companies that are expeiencing net losses or have profits much less than expectation.
Types Of Fraud
A third classfication scheme divides divides fraud according to vistims
1.Frauds where a companyo organization in the victim.
a. Employee embezzlement-perpetrator is a company or an organization employee.
b.Vendor fraud perpetrator is a costumer of the company or an prganization.
2. Management fraid- victims are shareholders and dept-holders of an organization or a company.
3.Investment scams and other consumer frauds-victims are unwary individuals.
4.Miscellaneous frauds-vistimcould be anyone.
Fraud that doesnt fall into one of th first three types and may have been commited for reasons other than financial gain is simple ladebeled miscellaneous fraud. These types of fraud are summarized in Table 1.2 and are discussedin the paragraphs that follow.
Employee Embezzlement is the most commom type of occupational fraud. As stated previously in this type of fraud, employees deceive there employees deceive their employees by taking company assets. Embezzlement can be either direct or indiret. Direct fraud occurs when an employees steals company cash, inventory tools supplies or other assets. It also occurs when employees establish dummy companies and have their employers pay for goods that are not actually delieverd. With direct fraud company assets go directly into the perpetrators pockets without the involvment of third parites. Indirect employee fraud on other hand occurs when employees take bribes or kickbacks from vendors customers or other outside the company to allow for lower sales prices higher purchase prices nondelivery of goods or the delivery of inferior goods. In these cases payment to employees is ussually made by organizations deal with the perpetratos employer not by the employer itself.
An example of direct employee fraud is the fraud perpetrated againtd Liahona Consrtuction which has in the home repair business. Unfortunately management didnt know that one of their employees was also in this business. The employee used $25,000 of the company`s supplies and equiptment to do his own remodeling jons pocketing the profits himsels.
TYPES OF FRAUD
Types Of Fraud