Question

With occupational fraud, the activity:

1) is c________
2) violates the employee's _________ to the organization
3) is for _______ or _______ financial benefit
4) costs the organization ________, ________, or _________

Answer 1

Occupational fraud is a deceptive activity that breaks the trust between an employee and an organization, carried out for personal financial gain and costing the organization in terms of money, resources, or reputation.

Step-by-step explanation:

With occupational fraud, the activity: 1) is concealed, 2) violates the employee's fiduciary duty to the organization, 3) is for personal or direct financial benefit, 4) costs the organization money, resources, or reputation. Occupational fraud encompasses a wide range of illicit behaviors performed by employees or contractors against their employers. It includes activities such as embezzlement, payroll fraud, and false invoicing.

These actions violate the trust placed in individuals by their employers and can lead to significant financial and reputational damage to the organization, affecting not only its immediate resources but its ability to operate effectively in the future.

The subject of occupational fraud aligns with efforts and compensation theories, as individuals engage in fraudulent activities, seeking unwarranted rewards that are not in line with the effort they expend or the costs they incur in their work activity.

The decision to commit fraud may be influenced by a cost-benefit analysis, where the perceived benefits of the fraudulent activity outweigh the potential costs, such as the risk of being caught and the resulting consequences.