What Is Financial Fraud?
Financial fraud is a situation in which the legal and ethical management of financial resources does not take place. In most countries around the world, this type of fraud occurs due to deliberate decisions and actions made by people who handle money and other asts on behalf of employers or clients. However, there are a few places around the world where the unintentional mishandling of funds is also classified as fraud and is subject to the same legal censure as any deliberate action.
In most cas, the fraudulent handling of financial resources will lead to substantial loss for an investor or a corporation. The financial loss is sometimes carefully hidden in the accounting records that are ud to track activity involving the resources, allowing it to continue until a great deal of money and other asts are siphoned off and no longer in the control of the owner. Business fraud of this type may be conducted by any company officer or employee who has access to corporate resources, and may continue for an extended length of time before becoming apparent.
There are veral different ways that financial fraud can take place. The most common approach is to misappropriate funds or other resources. For example, submitting an expen report containing line items for legitimate expens that never took place could be considered fraudulent activity. In like manner, inventory theft or the deliberate padding of payroll disburments would also be considered unethical and usually illegal activity.
Falsifying financial statements and records would also be considered an example of financial fraud. Known in some countries as “cooking the books,” the Accounts Receivables and Payables are deliberately altered to hide the fact that funds taken in by the company are diverted for the personal u of someone involved in the accounting process. In some cas, two ts of accounting records may be maintained. One t is a true and accurate accounting, while the other is the altered accounting that can be ud to divert suspicion of illegal activity when and as necessary.
Financial fraud also takes place when bribes or kickbacks are accepted in order to manipulate a business decision. In situations where an employee is found to be involved
with a competitor, a conflict of interest usually exists and could involve the sale of proprietary information for personal gain. With both situations, the reception of monetary gains by the individual are likely to hurt the company financially and result in a loss that would not have occurred otherwi.
Depending on the nature of the financial fraud, a corporation may choo to pursue legal action to recover the lost asts, or handle the situation internally. The cour of action often depends on the amount of the fraud, and how much damage the company believes would be done to consumer’s confidence in the company if the fraud were made public. In some cas, the employee guilty of the fraud may be offered the opportunity to make partial restitution and resign from his or her position, and the matter is considered clod. At other times, the company may choo to procute the fraud using any and all means provided by current laws. 春天的词
Types of Financial Fraud
1. 麦穗的故事Misappropriation of income or asts – A perpetrator, often a family member or
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caregiver, obtains access to Social Security checks, pension payments, checking or savings account, credit card or ATM, or withholds portions of checks cashed for the victim.
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2. Fictitious relative – The perpetrator calls the victim pretending to be a relative in巧克力蛋糕
distress and in need of cash and asks that money be transferred either into a financial institution account or wired.
3. Identity theft – Using one or more pieces of the victim’s personal identifying 万般旖旎
information (including, but not limited to, name, address, driver’s licen, date of birth, Social Security number, account information, account login credentials, or family identifiers), a perpetrator establishes or takes over a credit, deposit, or other financial account (“account”) in the victim’s name.
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4. Financial institution employee fraud – The perpetrator calls the victim pretending to be a curity officer from the victim’s financial institution. The perpetrator advis the victim that there is a system problem or internal investigation being conducted. Thevictim is asked to provide his or her Social Security number for “verification purpos” before the conversation continues. The number is then ud for identity theft or otherillegal activity.
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5. Financial institution examiner fraud – The victim believes that he or she is assisting authorities to gain evidence leading to the apprehension of a financial institution employee or examiner that is committing a crime. The victim is asked to provide cash to bait the crooked employee. The cash is then ized as evidence by the “authorities” to be returned to the victim after the ca.
