Corporate fraud can occur in many aspects of business transactions and within a business.
Common types of fraud include:
- Financial statement falsification: a business falsifies its financial statements, such as accounting records, to dupe banks and investors into providing capital based on inflated numbers.
- Skimming: incoming funds are intercepted before the funds can be recorded in a company’s accounting records.
- Personal purchases: an employee uses corporate funds to purchase goods and services for his or her personal benefit.
- Tax avoidance: a corporation alters its tax returns to reduce its taxable corporate income, resulting in lower tax remittances.
- Misrepresentation and omissions: a seller misrepresents a material fact or fails to disclose a material fact that induces a corporation or person into purchasing an asset or investing.
