Question

what is fraud, what causes fraud and what are some of the types of fraud currently being perpetrated in the world. Please be sure to support your posting with citations from two articles which you will attach to your posting as a document.

Answer 1

Defination of fraud:

As per the Association of certified Fraud examiners (ACFE), Fraud could be defined as that act which is intentionally conducted in order to deprive other person's money or property by deceit, arutely or any other illegal means.

What causes fraud?

3. A person's decision to commit a fraud can be explained in the form of a fraud triangle, which is made up of pressure, oppurtunity and rationalization. A fraud is committed in a situation where a person who is entrusted with a responsibility misuses such position in the face of financial pressure, violates the trust and justifies the violation.

For example: An employee, X, is entrusted with the job of depositing cash receipts, another employee Y, is incharge of recording the cash receipts on a daily basis. X and Y, are low paid employees who handle high amounts of cash on a daily basis. They are entrusted with the cash, they both have a perceived financial pressure and oppurtunity to steal the money. They rationalise the situation and convince themselves that they are paid less and stealing a little cash at some intervals is not fraud.

Types of fraud:

The general three types of frauds are:-

1. Asset Miaappropriation

2. Bribery and Corruption

3. Financial Statement Fraud.

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