Introduction

Contrary to popular belief, fraud happens to good companies and to effective managers. Companies like Barings Bank and Deutsche Morgan Grenfell, which were devastated by very serious internal dishonesty, were well managed. Fraud becomes disastrous, mainly because the reaction is ineffective. Although most corporate victims survive, fraud devastates the careers of honest managers, puts jobs at risk, and undermines people's confidence in business. There are five main categories of corporate fraud: Corruption, Conflicts of interest, Theft of assets, false reporting or falsifying performance and Technological abuse. Every organization should set out a clear statement of its core values, and make sure these are followed by employees and third parties with which it deals through its 'extended enterprise'. Most victims have no policies and plans for reacting to fraud, and thus, in panic and disarray, make mistakes from which they never recover.