Page 574 - ACFE Fraud Reports 2009_2020

Glossary of Terminology

Asset misappropriation: A scheme in which an employee (e.g., employee files fraudulent expense report, claiming
steals or misuses the employing organization’s resources personal travel, nonexistent meals)
(e.g., theft of company cash, false billing schemes, or
inflated expense reports) Financial statement fraud: A scheme in which an em-
ployee intentionally causes a misstatement or omission of
Billing scheme: A fraudulent disbursement scheme in material information in the organization’s financial reports
which a person causes his or her employer to issue a (e.g., recording fictitious revenues, understating reported
payment by submitting invoices for fictitious goods or expenses, or artificially inflating reported assets)
services, inflated invoices, or invoices for personal pur-
chases (e.g., employee creates a shell company and bills Hotline: A mechanism to report fraud or other violations,
employer for services not actually rendered; employee whether managed internally or by an external party
purchases personal items and submits an invoice to em-
ployer for payment) Management review: The process of management
reviewing organizational controls, processes, accounts,
Cash larceny: A scheme in which an incoming payment or transactions for adherence to company policies and
is stolen from an organization after it has been recorded expectations
on the organization’s books and records (e.g., employee
steals cash and checks from daily receipts before they can Non-cash misappropriations: Any scheme in which
be deposited in the bank) an employee steals or misuses non-cash assets of the
victim organization (e.g., employee steals inventory from
Cash-on-hand misappropriations: A scheme in which a warehouse or storeroom; employee steals or misuses
the perpetrator misappropriates cash kept on hand at the confidential customer financial information)
victim organization’s premises (e.g., employee steals cash
from a company vault) Occupational fraud: The use of one’s occupation for
personal enrichment through the deliberate misuse or
Check tampering scheme: A fraudulent disbursement misapplication of the employing organization’s resources
scheme in which a person steals his or her employer’s or assets
funds by intercepting, forging, or altering a check or elec-
tronic payment drawn on one of the organization’s bank Payroll scheme: A fraudulent disbursement scheme in
accounts (e.g., employee steals blank company checks which an employee causes his or her employer to issue a
and makes them out to himself or an accomplice; employ- payment by making false claims for compensation (e.g.,
ee steals an outgoing check to a vendor and deposits it employee claims overtime for hours not worked; employ-
into his or her own bank account) ee adds ghost employees to the payroll)

Corruption: A scheme in which an employee misuses his Primary perpetrator: The person who worked for the
or her influence in a business transaction in a way that victim organization and who was reasonably confirmed as
violates his or her duty to the employer in order to gain a the primary culprit in the case
direct or indirect benefit (e.g., schemes involving bribery
or conflicts of interest) Register disbursements scheme: A fraudulent disburse-
ment scheme in which an employee makes false entries
Employee support programs: Programs that provide on a cash register to conceal the fraudulent removal of
support and assistance to employees dealing with person- cash (e.g., employee fraudulently voids a sale on his or
al issues or challenges, such as counseling services for her cash register and steals the cash)
drug, family, or financial problems
Skimming: A scheme in which an incoming payment is
Expense reimbursements scheme: A fraudulent disburse- stolen from an organization before it is recorded on the
ment scheme in which an employee makes a claim for organization’s books and records (e.g., employee accepts
reimbursement of fictitious or inflated business expenses payment from a customer but does not record the sale
and instead pockets the money)

90 REPORT TO THE NATIONS ON OCCUPATIONAL FRAUD AND ABUSE