The concept of fraud in legal practice is interpreted quite broadly and generally refers to the intentional commission of actions aimed at obtaining an improper or illegal benefit.
The terms «abuse» and «illegal actions» also have a broader interpretation and typically include violations of laws, bylaws, and internal regulations, as well as actions that are inconsistent with business ethics.
The combination of such actions creates a number of risk areas that can lead to a loss of trust in the company and cause significant reputational damage, including for ethical reasons. These risks include:
other forms of abuse (conflicts of interest, use of insider information for personal gain, discrimination, illegal use of trade secrets, violations of antitrust and environmental regulations).
misrepresentation of financial statements (inaccurate revenue reporting, overstatement of assets, understatement of liabilities, and other similar actions);
misappropriation of property (embezzlement, payroll fraud, theft, procurement irregularities, commission abuses, counterfeit production and trafficking, etc.);
obtaining revenue or assets through illegal or fraudulent means (inflated invoicing, customer deception, fictitious sales, and other manipulations);
reducing expenses or liabilities through illegal actions (tax schemes, payroll irregularities, misrepresentation of data provided to regulatory authorities, etc.);
the occurrence or increase of expenses and liabilities due to illegal or fraudulent transactions (bribery of employees of commercial or government entities, kickbacks, and similar actions);