OCCUPATIONAL FRAUD

Occupational fraud is “the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets.” Three categories of occupational frauds are: asset misappropriation (stealing or misuse of organizations assets, e.g. false invoicing, payroll fraud), corruption (using influence in business transactions that violates duty to employer, e.g. bribes, conflicts of interest), and fraudulent statements (intentional misstatement or omission of material information from the organization’s financial reports).

“All too often, preventable frauds occur because employees with suspicions lack any effective mechanism through which to share them. A confidential reporting channel for employees, suppliers, and others is an excellent and very useful tool to improve fraud detection.” [Ethics Hotline]

“Once the cultural tone is set, a company must build a framework for an overall fraud control plan. The plan should include policies and procedures – including Codes of Conduct or Ethics – that must be communicated to, and adhered to, by all members of the organization.” [Ethics Code]

Global Fraud Report, Annual Edition 2007/2008 – Kroll, www.kroll.com