the fraud tree

occupational fraud and abuse classification system

Click on occupational fraud categories below with the i icon to view definitions and statistical
information from the ACFE’s 2016 Report to the Nations on Occupational Fraud and Abuse.

i i i
Corruption Asset Financial
Misappropriation Statement Fraud

Net Worth/ Net Worth/

Conflicts of Illegal Gratuities Economic Net Income Net Income
Interest Bribery Extortion Overstatements Understatements

Purchasing Invoice Timing Timing

Schemes Kickbacks Differences Differences

Sales Fictitious Understated

Bid Rigging Revenues Revenues
Schemes

Concealed Overstated
Liabilities and Liabilities and
Expenses Expenses

Improper Improper
Asset Asset
Valuations Valuations

Improper Improper
Disclosures Disclosures

i
Cash Inventory and All
Other Assets

i
Theft of Cash Theft of Cash Fraudulent Misuse Larceny
on Hand Receipts Disbursements

Asset
i i i i i Expense i i Requisitions
and Transfers
Skimming Cash Larceny Billing Payroll Check Register
Schemes Schemes Reimbursement Tampering Disbursements
Schemes
False Sales
and Shipping
Shell Ghost Mischaracterized
Refunds Employee Forged Maker False Voids
Sales Receivables Company Expenses
and Other Purchasing
and Receiving
Non- Overstated
Accomplice Falsified Forged
Write-Off Expenses Endorsement False Refunds
Unrecorded Vendor Wages
Schemes Unconcealed
Larceny
Personal Commission Fictitious
Lapping Purchases Schemes Altered Payee
Understated Expenses
Schemes

Multiple Authorized
Unconcealed Reimbursements Maker
 X

Corruption
A scheme in which an employee misuses his or her influence in a business trans-
action in a way that violates his or her duty to the employer in order to gain a direct

35+65+D
or indirect benefit.

35.4% median loss:

of cases
$200,000
 X

Asset Misappropriation
A scheme in which an employee steals or misuses the employing organization’s

84+16+D
resources.

83.5% median loss:

of cases
$125,000
 X

Financial Statement Fraud

A scheme in which an employee intentionally causes a misstatement or omission

10+90+D
of material information in the organization’s financial reports.

9.6% median loss:

of cases
$975,000
 X

Theft of Cash on Hand

A scheme in which the perpetrator misappropriates cash kept on hand at the victim

12+88+D
organization’s premises.

11.5% median loss:

of cases
$25,000
 X

Inventory and All Other Assets

A scheme in which an employee steals or misuses non-cash assets of the victim

19+81+D
organization.

19.2% median loss:

of cases
$70,000
 X

Skimming
A scheme in which an incoming payment is stolen from an organization before it is

10+90+D
recorded on the organization’s books and records.

11.9% median loss:

of cases
$53,000
 X

Cash Larceny
A scheme in which an incoming payment is stolen from an organization after it has

8+92+D
been recorded on the organization’s books and records.

8.4% median loss:

of cases
$90,000
 X

Billing Schemes
A scheme in which a person causes his or her employer to issue a payment by
submitting invoices for fictitious goods or services, inflated invoices or invoices for

22+78+D
personal purchases.

22.2% median loss:

of cases
$100,000
 X

Payroll Schemes
A scheme in which an employee causes his or her employer to issue a payment by

9+91+D
making false claims for compensation.

8.5% median loss:

of cases
$90,000
 X

Expense Reimbursement Schemes

A scheme in which an employee makes a claim for reimbursement of fictitious or

14+86+D
inflated business expenses.

14.0% median loss:

of cases
$40,000
 X

Check Tampering
A scheme in which a person steals his or her employer’s funds by intercepting,
forging or altering a check or electronic payment drawn on one of the organiza-

11+89+D
tion’s bank accounts.

11.4% median loss:

of cases
$158,000
 X

Register Disbursements
A scheme in which an employee makes false entries on a cash register to conceal

3+97+D
the fraudulent removal of cash.

2.7% median loss:

of cases
$30,000