Final answer:
Employee fraud typically falls into three categories: asset misappropriation, corruption, and financial statement fraud, which include theft, bribery, and manipulation of financial data.
Step-by-step explanation:
There are three main categories of employee fraud that businesses need to be aware of. The first category is asset misappropriation, which includes theft of company funds, false billing schemes, or payroll fraud. The second category is corruption, where employees use their influence in business transactions in a way that violates their duty to the employer for personal gain, such as accepting bribes or kickbacks. The third is financial statement fraud, which involves manipulating the company's financial reports to present a more favorable picture of its financial health than is actually the case.
Examples of how these categories can manifest include plagiarism in financial reports, cheating on expense accounts, misrepresenting sales figures, or encouraging colleagues to participate in a kickback scheme. Identity theft can also be considered a form of employee fraud when personal information is stolen for illicit gain. Employees may attempt to justify their fraudulent behavior through various means, such as claiming it was for a 'higher purpose', but this does not excuse the illegal activity.