Since January 1996
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What Is Fraud?
A general definition of fraud can be
stated as:
A purposeful deception, misrepresentation, or concealment of
the facts intended to cause injury or loss to another party, typically
for the sake of one's own direct or indirect gain.
Notice that fraud is done with purpose
and intent. We all make honest mistakes,
sometimes regardless of how careful we try to be. This isn't
fraud, it's just human nature.
Fraud can be perpetrated from inside and outside the company, and in
collusion it can be both.
Fraud can be perpetrated by employees, customers, suppliers, and
contractors, both willingly and unwillingly.
Fraud can also be perpetrated by management, especially when an employee
- perhaps due to lack of training or lack of the proper tools
(machinery, software, staff) - is forced to conceal or misrepresent
facts to meet unattainable goals.
Even employees who mean well can perpetrate fraud. For example, an
employee who loves his/her employer and is a dedicated worker may think
that the falsification of a regulatory report is protecting the company
against fines or retributions. However, if this fraud is discovered,
both the employee and the employer can face serious trouble, including
fines and possible civil or criminal actions.
There is never a "right" reason to perpetrate fraud! |
Fraud can be perpetrated by collusions
against a company from the inside, from the outside, and both.
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