In the CFE exam, what term refers to intentional misrepresentation of facts?

The correct answer is "fraud" because it encompasses the intentional misrepresentation of facts with the aim of deceiving another party for personal or financial gain. Fraud can take many forms, including falsifying information, misrepresenting material facts, and engaging in deceptive practices. This term is central to discussions of unethical behavior in business and finance, as it directly involves the manipulation or fabrication of information to influence decisions or actions.

In contrast, the other terms refer to different forms of dishonest or unethical behavior. Embezzlement specifically involves the misappropriation or theft of funds that have been entrusted to an individual's care, while corruption relates to the abuse of power for personal gain, often involving bribery or coercive actions. Collusion describes a scenario where two or more parties conspire to deceive or defraud others, but it does not solely focus on the misrepresentation of facts by a single entity. Thus, "fraud" is the term that best captures the essence of intentional misrepresentation.