Corruption
Definition
Schemes in which an employee misuses their position to gain a direct or indirect benefit, typically involving a third party. The four main subcategories in the Fraud Tree are bribery, illegal gratuities, conflicts of interest, and economic extortion. Unlike asset misappropriation, corruption often leaves few accounting traces, making it harder to detect through financial review alone.
Related terms
- Asset Misappropriation
- The largest Fraud Tree branch, covering schemes in which an employee steals or misuses the organisation's assets. Subcategories include cash schemes (skimming,...
- Financial-Statement Fraud
- Intentional misstatement or omission in financial reports to deceive users of those reports, typically to inflate earnings, understate liabilities, or maintain a...
- Skimming
- An off-book cash theft: revenue is stolen before it enters the accounting system, so no entry is ever made. Skimming is harder...
- Median Loss
- The loss figure at the midpoint of the distribution of cases, used in the ACFE's data because it is more representative of...
- Occupational Fraud
- The ACFE defines occupational fraud as the use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the...
- Occupational Fraud Tree
- The ACFE's hierarchical classification of occupational fraud schemes, with three top-level branches (asset misappropriation, corruption, financial-statement fraud) subdividing into dozens of named...
- Report to the Nations
- The ACFE's biennial global study of occupational fraud, compiled from cases submitted by Certified Fraud Examiners. Each edition analyses thousands of real...
Explained in these topics
- The ACFE Fraud Tree and Occupational Fraud ClassificationSchemes in which an employee misuses their position to gain a direct or indirect benefit, typically involving a third party. The four main subcategories in the...
- The ACFE Occupational Fraud TaxonomySchemes in which an employee misuses their position or influence for personal gain, typically involving an external party. Includes bribery, kickbacks, conflic...