FRAUD FACTS

Different Types of Fraud: Stealing, Lying, Cheating

Stealing is the most common type of fraud and includes asset misappropriation, theft of money, inventory, trademarks, or company secrets and processes.

  • A bartender services his friends a round of drinks. Rather than entering the sale into the cash register, the bartender keeps the money for himself.
  • An accounts receivable clerk receives a $1,000 payment from Customer A for a payment on account. The clerk deposits the money into her personal account and writes-off Customer A’s account receivable as a bad debt.

Lying includes financial statement fraud or dishonest behavior like not recording time or expenses accurately.

  • An employee creates a fake vendor to bill his employer for fictitious services.
  • Employee A arrives to work 30 minutes before employee B. Each day employee A punches both his timecard and employee B’s timecard, giving employee B unearned paid time.

Cheating includes corruption. This would include making deals with vendors or customers where the employee benefits by receiving a kick-back when a product is purchased or sold.

  • An employee makes a deal with Vendor A that if they stock his product, the employee gets “free” product for their personal use.

Business fraud by the numbers

$150k
is median loss caused by occupational fraud.
$1m+
is the amount lost in 23% of cases.
$250k
is the median loss caused by employees of ten or more years.
83%
of fraudsters are first-time offenders with clean employment histories.
Association of Certified Fraud Examiners (ACFE) - “2016 Report to the Nations on Occupational Fraud and Abuse” ACFE Website

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