Corporate fraud can be defined as a type of fraud that occurs in a business setting. This type of fraud includes the falsification of financial records, accounting records, and other reports about a company’s performance to make it appear more profitable than it actually is.
Some examples of corporate fraud are:
- Manipulating stock prices
- Falsifying financial statements
- Misrepresenting financial information to investors
- Falsely claiming that products are certified or endorsed by an independent organization
Accounting Fraud When accounting fraud occurs, it is because someone has made fraudulent transactions under the guise of your account numbers. These categories include theft and embezzlement, as well as using cheques for multiple payments or pretending to order fake services. Accountants manage the finances for a business. They create reports, complete tax returns and more. This can be a large responsibility, especially when accounting fraud occurs. There are three types of accounting fraud:
theft
embezzlement
check fraud.
Vendor Frauds
When your employees collaborate with vendors to cheat the company, it is known as vendor fraud. Schemes might include bribery, price-fixing, or accepting kickbacks from vendors in exchange for unfairly awarding contracts.
Payroll Fraud
Payroll is the most common type of employee fraud and includes Time sheet fraud where employees fake their hours or conspire with the payroll department for fraudulent schemes.
In the past, payroll fraud was not a major concern. But with the advent of technology, it has become easier to commit fraud. In fact, payroll fraud is one of the most common types of employee fraud. One way to combat this is by using AI-based timekeeping software that can identify anomalies in time cards and other records. It can also help organizations to identify potential discrepancies in order to prevent them from becoming more serious problems.
Bribery/Corruption
Bribery and corruption can be incredibly damaging to the organization’s reputation. The problem includes employees asking outsiders for favors in return for work or compromising company principles simply to gain personal benefits. Some even create shell companies to divert funds and assets.
Bribery and corruption are very common in the workplace. It is estimated that $1 trillion is spent by global businesses in bribes each year. Bribery and corruption can be incredibly damaging to the organization’s reputation because it undermines trust which is critical for organizational success.
