Questions and Answers
What is fraud?
A knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment.
What is one of the maximum penalties for fraud under the Crimes Act 1900 (NSW)?
35% of Australian respondents said they experienced fraud.
True
Which of the following is NOT one of ACFE's major categories of fraud?
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One of the main elements of fraud is a false ___.
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What type of fraud was reported as the most common in Australia for 2020-21?
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What percentage of Australians experienced personal fraud in 2020-21?
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How many elements are there in the definition of fraud?
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Study Notes
Fraud Overview
- Definition: Fraud is the knowing misrepresentation of truth or concealment of material facts, inducing someone to act to their detriment.
- Types: It can be categorized as a tort with a burden of proof on the plaintiff, or a criminal act with a burden of proof on the Crown.
Legislation
- Crimes Act 1900 (NSW), Section 192E outlines fraud involving deception to obtain property dishonestly.
- Elements of fraud include:
- The accused must be a person.
- Deception must be dishonest.
- Property must be obtained or a financial disadvantage caused.
- Maximum penalty for fraud: 10 years imprisonment.
Fraud Statistics
- Sources of fraud statistics include:
- Government agencies, research initiatives, insurance companies, and victims.
- Personal fraud incidence in Australia:
- 11% of Australians experienced personal fraud in 2020-21, up from 8.5% in 2014-15.
- Increase driven by card fraud (up from 5.9% to 6.9%) and scams (up from 2.4% to 3.6%).
Impact of Scams
- Scams are fraudulent attempts to obtain personal information or money.
- In 2020-21, 55% of Australians aged 15 and over were exposed to scams, a similar rate to 2014-15 (56%).
Seriousness of Fraud
- 35% of Australians have experienced fraud directly.
- 19% reported being asked for a bribe in the last 24 months.
- Significant financial loss due to fraud:
- 22% of organizations lost over $7.1 million from fraud, while 40% lost over $1.4 million in the same period.
- Fraud affects pricing of goods and services, with customers ultimately bearing the costs.
Elements of Fraud
- Seven essential elements define fraud:
- A representation made about a material point.
- The representation must be false.
- Must be made intentionally or recklessly.
- The victim must believe in the representation and act upon it.
- The victim incurs damage as a result.
Types and Classifications of Fraud
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Major Categories by ACFE:
- Asset misappropriation
- Corruption
- Fraudulent financial statements
- Employee embezzlement
-
Classification Based on Victims:
- Victims can be organizations (e.g., employee embezzlement, vendor fraud) or shareholders due to management fraud.
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Test your understanding of concepts presented in Chapter 1 of the textbook. This quiz covers key points and important details to ensure you grasp the material thoroughly. Perfect for revision before your exams!
