Term
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Definition
| Acts in which individuals wrongfully use their influence in a business transaction in order to procure some benefit for themselves or another person, contrary to their duty duty to their employer or the rights of another (for example, kickbacks, self-dealing, or conflicts of interest). |
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Term
| Common Fraud Perpetrator Red Flags |
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Definition
| Living beyond their means; Experiencing financial difficulties; Excessive organizational pressure |
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Term
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Definition
| Any illegal act characterized by deceit, concealment, or violation of trust. Frauds are perpetrated by parties and organizations to obtain money, property, or services; to avoid payment or loss of services; or to secure personal or business advantage. |
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Term
| Misappropriation of Assets |
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Definition
| Pilferage; Embezzlement; Defalcation |
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Term
| Fraudulent Financial Reporting |
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Definition
| Acts that involve falsification of an organization's financial statements (for example, overstating revenues, understating, liabilities, and expenses). |
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Term
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Definition
| Fraud in workplace: Falsification of financial statements; Asset misappropriation; Corruption |
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Term
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Definition
| Perceived need or pressure; Perceived opportunity; Rationalization |
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Term
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Definition
| The combination of process and structures implemented by the board to inform, direct, manage, and monitor the activities of the organization toward the achievement of its objectives |
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Term
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Definition
| The identification and analysis (typically in terms of impact and likelihood) of relevant risks to the achievement of an organization's objectives, forming a basis for determining how the risk should be managed. |
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Term
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Definition
| An action, or set of actions, taken by management to achieve a desired risk management strategy. Risk response can be categorized as risk avoidance, reduction, sharing, or acceptance. |
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Term
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Definition
| According to the ACFE's Report to the Nation, occupational frauds are much more likely to be detected by a tip than by audits, controls, or other means. |
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Term
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Definition
| The entity-wide attitude of integrity and control consciousness, as exhibited by the most senior executives of an organization. See also Control Environment. |
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Term
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Definition
| The attitude and actions of the board and management regarding the significance of control within the organization. |
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Term
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Definition
| Activities that help employees understand the purpose, requirements, and responsibilities of a fraud risk management program. |
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Term
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Definition
| A level of assurance that is supported by generally accepted auditing procedures and judgments. |
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Term
| Regulatory and Legal Misconduct |
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Definition
| Includes conflicts of interest, insider trading, theft of competitor trade secrets, anti-competitive practices, environmental violations, and trade and customs regulations in areas of imports/exports. |
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Term
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Definition
| The severity of outcomes caused by risk events. Can be measured in financial, reputation, legal, or other type of outcomes. |
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Term
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Definition
| The probability that a risk event will occur. |
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Term
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Definition
| The acceptable levels of risk size and variation relative to the achievement of objectives, which must align with the organization's risk appetite. |
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Term
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Definition
| An activity that is designed to deter unintended events from occurring. |
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Term
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Definition
| Acts involving two or more persons, working together, whereby established controls or procedures may be circumvented for the gain of those individuals. |
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Term
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Definition
| An activity that is designed to discover undesirable events that have already occurred. A detective control must occur on a timely basis (before the undesirable event has had a negative impact on the organization) to be considered effective. |
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Term
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Definition
| Working with legal counsel to protect the results of investigations, supporting working papers, and communications with counsel. |
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Term
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Definition
| Generally fit one of two profiles: greater good oriented or scheming, self-centered types. |
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Term
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Definition
| Applying the care and skill expected of a reasonably prudent and competent internal auditor: Does not imply infallibility. |
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Term
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Definition
| The state of mind in which the internal auditors take nothing for granted; they continuously question what they hear and see and critically assess audit evidence. |
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Term
| Certified Fraud Examiners |
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Definition
| Individuals certified as specialists in conducting forensic forensic accounting investigations and advising on fraud risks and other matters. |
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