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Related to Frauds: Accounting Frauds


Any attempt to deceive another for financial gain. A clear example of fraud is selling a new issue that does not really exist. That is, the company can collect money from investors and, rather than use it to finance operations, pocket the money and do nothing. There are a number of types of fraud. Common types include forgery of documents, false claims in insurance, and filing bankruptcy to avoid debt rather than because of financial hardship.


Deception carried out for the purpose of achieving personal gain while causing injury to another party. For example, selling a new security issue while intentionally concealing important facts related to the issue is fraud.


the gaining of financial advantage by a person who deliberately deceives another person or business, by mispresenting himself.


A deceitful practice. Fraud consists of a misrepresentation of a material fact that is relied upon by another party to his or her detriment.There is no requirement that the misrepresentation be intentional.The thing misrepresented must be a fact; it is very difficult to prove fraud when one fails to fulfill his or her obligations but had good intentions in the beginning.

There are three types of fraud:

1. Intentional fraud. Punitive damages may be assessed for this type of fraud.

2. Negligent fraud. As when one makes a statement recklessly but without any intention to deceive, and someone relies on that statement and is injured when it turns out to be false. One example would be a real estate agent telling a buyer that all appliances are new when, in reality, the agent didn't know but thought they looked new. Depending on the degree of recklessness involved, this type of fraud may or may not support punitive damages.

3. Innocent fraud. As when one takes steps to confirm facts but is perhaps mistaken or given mistaken information, and then relays that information to someone else who relied on it and was injured.

The Statute of Frauds is a rule that says certain contracts must be in writing, including contracts having to do with real estate. It has nothing to do with fraud, per se, except to protect against possible fraud by requiring a writing.

References in periodicals archive ?
According to a 1999 COSO research project, at least 83% of 200 financial statement frauds were engineered by the CEO, CFO or both.
CPA firms, particularly those with established investigative services divisions, seek to identify existing frauds and establish prevention programs to insulate companies from incurring future losses.
Given the emotions that surround the issue of fraud in science, Stealing into Print* is surprisingly cool, cerebral, and, on occasion, dry.
JofA: Are financial statement frauds active in Europe?
People buy spreads for a variety of uses, including welfare, check immigration, and tax frauds.
3) Indeed, recent statistical data indicate that credit card fraud is growing in proportion to industry advancements.
The criminal prosecution of fraud (see exhibit, at left), as well as civil frauds, share a common thread: They both contain the legal elements of fraud.
Although it is impossible to summarize all of the check fraud schemes currently operating, three schemes in particular - large-scale counterfeiting, identity assumption, and payroll check fraud - typify frauds being tracked by bank security officials and law enforcement authorities throughout the nation.
In the ACFE 2004 study, about 40% of frauds were discovered through whistle-blowers.