What is Fraud?
Fraud encompasses a range of irregularities and illegal acts characterised by intentional
deception or misrepresentation, which an individual knows to be false or does not believe
to be true. (Practice Advisory 1210.A2-1, Institute of Internal Auditors)
Types of Fraud:
1. Misrepresentation or concealment of material facts
2. Bribery
3. Conflict of interest
4. Theft of money or property
5. Theft of intellectual property
6. Breach of fiduciary duty
7. Statutory offences
Why do Frauds occur?
There are generally three factors that influence the commission of fraud.
1. Opportunity: Failure of controls, Poor control designs, lack of controls or overriding
existing controls.
2. Motive: Rationalising acts, pressure, power or other motivating factors.
3. Rationalisation: Denial of acts, cultural differences or personal difficulties.
Fraud encompasses a range of irregularities and illegal acts characterised by intentional
deception or misrepresentation, which an individual knows to be false or does not believe
to be true. (Practice Advisory 1210.A2-1, Institute of Internal Auditors)
Types of Fraud:
1. Misrepresentation or concealment of material facts
2. Bribery
3. Conflict of interest
4. Theft of money or property
5. Theft of intellectual property
6. Breach of fiduciary duty
7. Statutory offences
Why do Frauds occur?
There are generally three factors that influence the commission of fraud.
1. Opportunity: Failure of controls, Poor control designs, lack of controls or overriding
existing controls.
2. Motive: Rationalising acts, pressure, power or other motivating factors.
3. Rationalisation: Denial of acts, cultural differences or personal difficulties.
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 | Financial statement frauds are very costly |
| Banking is one of the most common industry to be affected by fraud |
| Small businesses are very vulnerable to occupational fraud. |
| Fraud is mostly committed by Accounting Department & Upper Management | |
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| Fraud Risk |
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Fraud Examiner Manual, 2009
| Tools to counter Fraud: |
