Is
corruption a form of fraud? Or are these two different things? A review of the
definition of these terms may suggest an answer. In broadest terms, Fraud means any crime to gain that uses deception, while corruption means decay or the act of dishonesty.
The
International Auditing and Assurance standard board defines Fraud as “any
illegal act characterised by deceit, concealment or violation of trust". Fraud
schemes are used to commit corrupt activities and the Association of Certified
Fraud Examiners further categorises it into Asset Misappropriation, Financial
statement irregularities and Corruption.
The
OECD/ World bank defines corruption as “the
abuse of public or corporate office for private gain” and can be categorised in
different forms such as bribery, extortion, fraud, trafficking illegal
gratuities and economic extortion.
The
business dictionary differentiates between these two terms as follows: Fraud is misrepresenting yourself or something falsely. For example, if you use a fake ID, you are committing fraud by misrepresenting your identity.
Corruption
is a broad term that can be applied to fraud, as well as other dishonest acts
such as bribery, extortion or embezzlement. The two can be used in several
instances but can apply specifically to business. Corporate leaders are often
prosecuted for various fraudulent and corrupt acts, as well as political office
holders.
Have
you reached a conclusion yet? One thing we can for sure, agree on: Fraud and
Corruption are very bad practices and should be prevented at an early stage.