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Business Management Review | Monday, March 07, 2022
Fraud comes in several forms but can be mainly subdivided into three categories: misappropriation of assets, corruption, and fraud in financial statements. Asset misappropriation, although less costly, accounted for 90% of all the fraud cases studied.
Fremont, CA: Employee fraud is a major problem faced by organizations of all types, sizes, locations, and industries. When we would all like to believe that our employees are loyal and work for the benefit of the organization (and most likely are), there are still many reasons your employees may commit fraud and several ways in which they could do so.
kinds of fraud in business
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• Fraud comes in different forms but can be subdivided into three categories: misappropriation of assets, corruption, and fraud in financial statements. Asset misappropriation, although less costly, accounted for 90% of all the fraud cases studied. These are schemes in which an employee steals or exploits his organization's resources. Examples of misappropriation of assets include stealing cash before or after recording, making false claims for reimbursement of expenses, and taking non-cash assets of the organization.
• Financial Statement fraud accounted for less than five percent of the cases but resulted in the most median loss. These schemes involve omitting or intentionally missing information in the company's financial reports. This may be in the form of fictitious revenues, hidden liabilities, or inflated assets.
• Corruption fell in the middle and accounted for less than one-third of the cases. Corruption schemes occur when employees use their influence in business transactions to their advantage while violating their duty to the employer. Examples of corruption include bribery, extortion, and conflict of interest.
• You might be impressed by the employees who haven't missed a working day in years. While they may seem like loyal employees, it could be a sign that these employees have something to hide and are worried that someone will detect their fraud if they have been out of the office for some time. In addition, it is a good idea to incorporate employees into different jobs within a company. This may also reveal fraudulent activity since it allows a second employee to review the activities of the former.
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