Page 475 - ACFE Fraud Reports 2009_2020

Glossary of Terminology

Asset misappropriation: A fraud scheme in which Expense reimbursements: A fraudulent disbursement
an employee steals or misuses the employing organi- scheme in which an employee makes a claim for reim-
zation’s resources (e.g., theft of company cash, false bursement of fictitious or inflated business expenses
billing schemes or inflated expense reports) (e.g., employee files a fraudulent expense report,
claiming personal travel, nonexistent meals, etc.)
Billing: A fraudulent disbursement scheme in which a
person causes his or her employer to issue a payment Financial statement fraud: A scheme in which an
by submitting invoices for fictitious goods or services, employee intentionally causes a misstatement or
inflated invoices or invoices for personal purchases omission of material information in the organization’s
(e.g., employee creates a shell company and bills financial reports (e.g., recording fictitious revenues,
employer for services not actually rendered; employee understating reported expenses or artificially inflating
purchases personal items and submits an invoice to reported assets)
employer for payment)
Hotline: A mechanism for reporting fraud or other
Cash larceny: A scheme in which an incoming pay- violations, whether managed internally or by an
ment is stolen from an organization after it has been external party
recorded on the organization’s books and records (e.g.,
employee steals cash and checks from daily receipts Management review: The process of management
before they can be deposited in the bank) reviewing organizational controls, processes, accounts
or transactions for adherence to company policies
Cash-on-hand misappropriation: Any scheme in and expectations
which the perpetrator misappropriates cash kept on
hand at the victim organization’s premises (e.g., em- Non-cash misappropriations: Any scheme in which an
ployee steals cash from a company vault) employee steals or misuses non-cash assets of the vic-
tim organization (e.g., employee steals inventory from
Cash register disbursements: A fraudulent disburse- a warehouse or storeroom; employee steals or misuses
ment scheme in which an employee makes false entries confidential customer financial information)
on a cash register to conceal the fraudulent removal of
cash (e.g., employee fraudulently voids a sale on his or Occupational fraud: The use of one’s occupation for
her cash register and steals the cash) personal enrichment through the deliberate misuse
or misapplication of the employing organization’s
Check tampering: A fraudulent disbursement scheme resources or assets
in which a person steals his or her employer’s funds by
intercepting, forging or altering a check drawn on one Payroll: A fraudulent disbursement scheme in which
of the organization’s bank accounts (e.g., employee an employee causes his or her employer to issue a
steals blank company checks and makes them out to payment by making false claims for compensation
himself or an accomplice; employee steals an outgoing (e.g., employee claims overtime for hours not worked;
check to a vendor and deposits it into his or her own employee adds ghost employees to the payroll)
bank account)
Primary perpetrator: The person who worked for the
Corruption: A fraud scheme in which an employee victim organization and was reasonably confirmed as
misuses his or her influence in a business transaction the primary culprit in the case
in a way that violates his or her duty to the employ-
er in order to gain a direct or indirect benefit (e.g., Skimming: A scheme in which an incoming payment
schemes involving bribery or conflicts of interest) is stolen from an organization before it is recorded on
the organization’s books and records (e.g., employee
Employee support programs: Programs that provide accepts payment from a customer but does not record
support and assistance to employees dealing with the sale and instead pockets the money)
personal issues or challenges, such as drug, family or
financial counseling services

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