Definition of Fraud
The term ‘fraud’ commonly includes activities such as theft, corruption, conspiracy, embezzlement, money laundering, bribery and extortion.
Even in a rapidly changing business environment with emerging technologies and constant challenges, at the core of every organization is its employees — those carrying out operations, executives, administrative personnel, and even the board. Employees are faced with an increasing pressure to meet the bottom line at work and at home, and they can be exposed to a variety of ethical dilemmas. These dilemmas can tempt employees to commit fraud against their employer.
The cost of occupational fraud can be minimized with fraud prevention. Depending on the size and complexity of an organization, internal audit can be called on to recommend improvements or evaluate an organization’s controls and commitment to fraud prevention. An organization’s internal controls are not always specifically designed to prevent fraud; however, often there are fraud prevention components inherent in internal controls related to the control environment, segregation of duties, and monitoring activities.
