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What are the basic categories of occupational fraud and who is likely to commit fraud?

Fraud in the workplace may cause U.S. organizations to lose an average of 7% of their annual revenue. It is therefore important to know the basic categories of occupational fraud, and who is likely to commit fraud.

Occupational fraud is essentially defined as,”taking advantage of an occupational situation to attain personal enrichment by intentionally misusing or misapplying an organization’s resources.”

The three basic categories of occupational fraud are:

  1. Fraudulent financial statements;
  2. Misappropriation of assets; and
  3. Corruption (like bribes and kickbacks).

Small businesses are especially vulnerable to occupational fraud – the average loss suffered by organizations with fewer than 100 employees is $200,000.

The average perpetrator of occupational fraud is a male in his 40s, with no previous criminal record. Employees are most likely to commit occupational fraud, accounting for about 40% of cases.

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