Final answer:
Fraud detection involves methods pinpointing irregularities, with audit, reconciliation, and examination being key components. If accused of theft, an employee should request an investigation and provide evidence to clear their name. Embezzlement is an example of corporate crime.
Step-by-step explanation:
Fraud detection involves various methods that help identify discrepancies that may indicate fraudulent activities. Here are examples relating to the elements of fraud: theft act, concealment, and conversion:
- Theft Act: If a retail store cashier's drawer has been consistently coming up short, an investigation may reveal the cashier making unauthorized transactions, failing to register sales for friends, or directly taking money. An audit of transaction logs compared to surveillance footage could detect such fraudulent behavior.
- Concealment: In an attempt to hide the theft, the cashier might manipulate sales records or alter accounting entries. Fraud can be detected through reconciliation procedures that uncover discrepancies between actual sales, reported sales, and inventory levels.
- Conversion: Conversion involves the unauthorized use of the company’s assets. If the cashier is suspected of using store funds for personal use, an examination of receipts, accounting records, and personal bank statements can indicate fraud.
If an employee is wrongfully accused of being a thief due to suspicion of stealing, they should request a thorough investigation, provide evidence of their innocence, such as trustworthy alibi or inconsistencies in the accusations, and seek representation if necessary to deal with the label.
Regarding corporate crime, an example could be embezzlement, which falls under this category as it involves the misappropriation of funds placed in one's trust or belonging to one's employer. In contrast, crimes like assault and burglary are typically not classified as corporate crimes.