Occupational Fraud
Definition
The ACFE defines occupational fraud as the use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the employing organisation's resources or assets. The definition limits scope to fraud committed by insiders, which distinguishes it from external fraud such as identity theft or vendor-side deception that the organisation does not enable.
Related terms
- Fraud Diamond
- Wolfe and Hermanson's 2004 extension of the fraud triangle that adds capability as a fourth condition. The model holds that pressure, opportunity,...
- Non-Shareable Financial Problem
- Cressey's original term for the pressure element. The problem need not be objectively severe; what matters is that the perpetrator perceives it...
- 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,...
- Control Environment
- The first and foundational component of the COSO framework. It encompasses the board's oversight, management's philosophy and operating style, organisational structure, commitment...
- Corruption
- Schemes in which an employee misuses their position to gain a direct or indirect benefit, typically involving a third party. The four...
- 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...
- Fraud Triangle
- A model, developed by criminologist Donald Cressey, proposing that occupational fraud requires three converging conditions: pressure (financial need or incentive), opportunity (a...
- Management Override
- The circumvention of established internal controls by members of senior management. A key fraud risk in any organisation because those who set...
- Predication
- The reasonable basis that justifies opening a fraud examination. The ACFE holds that no examination should begin without adequate predication, meaning a...
- Rationalisation
- In the context of the fraud triangle, the mental justification a perpetrator uses to excuse fraudulent conduct. In interviewing, rationalisation is used...
- Rationalization
- The internal justification that allows a person to commit fraud while maintaining a self-image as an honest individual. Common forms include 'I...
- 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 ClassificationThe ACFE defines occupational fraud as the use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the employing org...
- The Fraud Triangle: Pressure, Opportunity, and RationalisationThe use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the employing organisation's resources or assets. Define...
- The Fraud Triangle and Cressey's ModelThe use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the employing organisation's resources or assets. Cresse...