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Corporate fraud consists of activities undertaken by an individual or company that are done in a dishonest or illegal manner, and are designed to give an advantage to the perpetrating individual or company. Corporate fraud schemes go beyond the scope of an employee's stated position, and are marked by their complexity and economic impact on the business, other employees and outside parties.
Corporate fraud is the intentional misrepresentation of company financial information or activities designed to mislead the public and increase the profits of the company. Typical cases of corporate fraud are complex, highly secretive, and if discovered involve economic scandals or evasions of financial responsibilities.
In many cases, fraudulent activities start out small and are never intended to be ongoing. Thus, it’s difficult to detect fraud in its early stages. Often the fraud goes on undetected for long periods of time before the scheme is uncovered by a whistleblower, the lack of planning on the perpetrators part, or the inabilities of the scheme to keep up with the demands of its expansion. The government actively tries to prevent fraud with policies, laws, and methods designed to help law enforcement detect schemes before they blow up. The main body in charge of fraud prevention in public companies is the SEC (Securities and Exchange Commission).