What type of fraud scheme usually involves falsifying invoices?

The type of fraud scheme that typically involves falsifying invoices is vendor fraud. This fraudulent activity often occurs when an employee creates or submits fake invoices from fictitious vendors or manipulates legitimate vendor invoices to inflate costs or charge for goods or services that were never provided. By doing so, the fraudster can divert company funds for personal gain, often resulting in significant financial losses for the organization.

Vendor fraud can encompass a range of deceptive practices related to invoicing and payment processes, making it a specific category within the broader definition of fraud. This type of scheme is particularly insidious because it can go unnoticed for a long time, especially if internal controls are weak or if the company does not regularly audit vendor transactions.

Bribery and corruption typically involve unethical acts to influence business decisions or secure advantages but do not primarily center around the falsification of invoices. Asset misappropriation refers to the theft or misuse of an organization's assets, which might include stealing cash or inventory but is not specifically related to the manipulation of invoices. Financial statement fraud involves misrepresenting an organization's financial status and is more complex, generally targeting reporting and disclosure practices rather than individual transaction-related processes like invoicing.