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11.1 Forms of Fraud

N 35/2018 STA
  1. 11.1.1Frauds are broadly classified into Internal and External Frauds which are defined below:
    1. a)Fraud carried out by individual(s) employed by the Licensed Person is called Internal Fraud; and
    2. b)Fraud committed by an external party against the business of the Licensed Person is referred to as External Fraud.
  2. 11.1.2Fraud normally includes the following acts, although the list is not exhaustive:
    1. a)Misappropriation;
    2. b)Misrepresentation:
      • •Misrepresentation of Financial Statements; and
      • •Misrepresentation of Non-Financial Statements.
    3. c)Corruption:
      • •Bribery; and
      • •Illegal gratuities.
    4. d)Misconduct:
      • •Breach of internal policies and procedures; and
      • •Breach of applicable Laws, Rules, Regulations, Notices and the Standards.
    5. e)Any other deliberate deception for unlawful personal gain.
  3. 11.1.3Throughout this chapter, the terminology “Fraud” includes all types of frauds mentioned under Paragraphs 11.1.1 and 11.1.2 of this Chapter.