13 Fraud

According to Kaplan (2022), there are various criminal offences that may be committed by individuals in reference to the operation, management and winding up of companies. Many of these offences are set out in the Companies Act 2006 (CA 2006). Examples include:

• failure to file accounts or annual return (section 451)
• providing false information to auditors (section 499)
• using a business name without approval (section 82)
• failure to disclose the required business details (section 82).

Figure 8 Criminal activities

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This is a cartoon. On the left, there is a man wearing a black hoodie. He is sitting in front of a computer, and there is a skull and crossbones on the computer. On the right, there are many documents, personal information, bank cards and banknotes hanging from the top of the image.

Figure 8 Criminal activities

Fraud can be defined as intentional deception, cheating or stealing.

A broader definition encompasses any crime for personal gain that uses deception and trickery to harm victims (Wells, 2011). In many cases, victims are unaware that they have been defrauded or deceived until considerable time has passed, but perpetrators of fraud always have the intention to deceive their victims for some personal gain. This gain could be either financial (e.g. to receive a bonus, obtain financing or evade tax) or non-financial (e.g. to satisfy ego, exact revenge or fulfil a desire to commit a crime).

Regardless of the type of gain to be made, the intent to deceive is present in all instances of fraud. Persons who act fraudulently willingly and knowingly commit the crime, while realising the harm that may be caused to the victim(s). This intention is one of the two main differences between fraud and error. The second difference between fraud and error is that fraud perpetrators will always conceal their crimes to avoid detection and prosecution. In the case of error, however, an honest person will never try to conceal their own mistake (Kassem, 2021).