Occupational Fraud

What is occupational fraud?

Occupational fraud is fraud committed by an employee on an employer in the course of their employment. They are more common and cause more financial loss to businesses than frauds committed by third parties. As employees will continue to work at the business, they will generally try to hide these frauds permanently, meaning that occupational fraud can be committed over an extended period of time.

Billing Schemes	This fraud is designed to cause the business to make a fraudulent payment to the employee, whilst recording the payment as a legitimate business expense in its records.
Cheque Theft	Employees may steal cheques as they flow in and out of the business system.
Collusion & Bribery	Collusion frauds occur off the books so there are no records to show what happened and no transaction that should have been recorded, but was not.
False Employee Claims	False expense claims arise when employees are entitled to incur expenses while performing their duties and be reimbursed for those expenses.
Ghost Employees	The aim of the fraud is enter the ghost into the payroll system and have a wage paid to it in a way that can be collected by the fraudster.
Inventory Record Fraud	These are frauds that involve the theft of inventory items that are hidden by manipulating the perpetual inventory records.
Inventory Sales & Purchases Fraud	These are frauds that involve the theft of inventory items that are hidden by manipulating the records in the sales and purchases processes.
Point of Sale Fraud	POS fraud is stealing money when a sale is made – at the Point of Sale.
Skimming Debtors	Skimming debtors is the theft of money received from a debtor before it is recorded as received.
Skimming Sales	Skimming sales is the theft of money received from a sale of good or service before it is recorded as received.
Fraud Risk Analysis	Fraud risk analysis is an assessment of the likelihood of a fraud being committed, and what can and should be done about it and whether that action is commercial.
COSO Fraud Model	COSO undertook a study into internal fraud controls and produced a model for internal fraud controls that has been widely accepted as a theoretical guideline.