Fraud Schemes - 6 Main Types Of Occupational Fraud

Fraud - Fraud Schemes - 6 Main Types Of Occupational Fraud

Good afternoon. Yesterday, I discovered Fraud - Fraud Schemes - 6 Main Types Of Occupational Fraud. Which is very helpful in my opinion therefore you. Fraud Schemes - 6 Main Types Of Occupational Fraud

Occupational Fraud: The use of one's vocation for personal enrichment straight through the deliberate misuse or misapplication of the employing organization's resources or assets.
-The key to occupational fraud is that the activity:

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Fraud

a. Is clandestine

b. Violates the employee's fiduciary duties to the organization

c. Is committed for the purpose of direct or indirect financial advantage to the employee

1. Laborer Embezzlement

-Most coarse type of occupational fraud (more than 80% of frauds)

-Employees deceive their owner by taking company assets.

-Cash most targeted asset, taken 90% of the time

Occupational Fraud can be either direct or indirect

-Direct Fraud: Laborer steals company cash, inventory, tools, supplies, or other assets, or establishes dummy associates and have employers pay for goods that are not truly delivered Does not use a 3rd party, the money goes straight to perpetrator's pockets.

-Indirect Fraud: employees take bribes or kickbacks from vendors, customers, or others outside the company to allow for lower sales prices, higher purchase prices, nondelivery of goods, or the delivery of inferior goods. Commonly payment to employees is made by organizations that deal with the perpetrator's employer, not the owner itself.

2. Management Fraud

-Usually fraud by top management's deceptive manipulation of financial statements

3. Venture Fraud

-Closely associated to Management fraud

-Fraudulent and Commonly worthless investments are sold to unsuspecting investors.

-Charles Ponzi is father of Venture scams

-In 2000, more than billion lost from telemarketing fraud

-Recent mutual fund frauds were Venture scams using store timing and late trading

-Illegal store timing is an Venture technique that involves short term in-and-out trading of mutual fund shares. This technique has caused losses to long term mutual fund investors of roughly billion per year.

-Late trading allowed superior investors to purchase mutual funds after 4 pm using that days Net Asset Value (Nav) rather than the next day's Nav that is required under law. Investors would capitalize on positive earnings news and then were allowed to immediately reap the advantage of the stocks upward movement the following day.

4. Vendor Fraud - 2 types

a. Fraud perpetrated by vendors acting alone

b. Fraud perpetrated straight through collusion between buyers and vendors

Usually results in either overcharge for purchased goods,
shipment of inferior goods, or nonshipment of goods even though
payment is made

5. Buyer Fraud

-Customers either do not pay full price for goods purchased, they get something for nothing, or they deceive organizations into giving them something they should not have.

6. Miscellaneous Fraud

-Fraud that doesn't fit into first five types and may have been committed for reasons other than financial gain

I hope you will get new knowledge about Fraud . Where you can offer utilization in your everyday life. And above all, your reaction is passed about Fraud .