. Select ant one of the examples of fraud from the previous activity. Write down the example chosen. Classify the type of fraud as one of the following;
1.1. Corruption
1.2. Asset misappropriation
1.3. Fraudulent statements
1.4. Occupational fraud and abuse
1.5. Explain why you chose that category of fraud.
nswers will vary according to the example chosen, but should match the categories as follows:
- Do research online / library to identify the most likely piece of legislation that would govern this activity. -Discuss and brain storm what legal recourse maybe available to employers in cases of fraud.
Give an example of the above.
What do you think the consequences of fraud would be for each of the following;
5.1. The organisation
5.2. The person committing the fraud
5.3. The customers of the organisation
5.4. The whole business sector
ecord your teams' conclusions and present to class.
Example: Employee A in a company's finance department intentionally inflated expenses in order to receive higher reimbursements.
Type of fraud: 1.2 Asset misappropriation
Reason: This example falls under asset misappropriation because the employee is manipulating financial records to misappropriate company assets (money in the form of inflated expense reimbursements).
Consequences of fraud:
5.1. The organization:
- Financial loss due to inflated expense reimbursements
- Damage to reputation and trust from stakeholders
- Possible decrease in employee morale and trust in the company
5.2. The person committing the fraud:
- Possible termination of employment
- Legal consequences such as criminal charges and fines
- Diminished reputation and future employability
5.3. The customers of the organization:
- The potential for increased prices or reduced quality of products/services to cover the financial loss
- Loss of faith in the company and potential loss of business
5.4. The whole business sector:
- Eroded trust and credibility in the industry
- Potential for increased regulatory scrutiny and stricter control measures for businesses in the sector
- Loss of investors and stakeholders' confidence in the sector's integrity.