Fraud and Transparency

Fraud is an illegal act which involves the deception of an individual by various means.

Corruption is also an illegal act in most countries and is an act undertaken by somebody in authority in an attempt to gain a benefit, be it for the company or for their personal gain.

Fraud and corruption happens in supply chains and is something that procurement professionals should be aware of, seek transparency, implement measures to prevent fraud and investigate any irregularities.

Fraud and corruption cover a variety of illegal and unethical practices including bribery, embezzlement and counterfeiting.

In most countries across the world fraud and corruption is illegal or at the very least seen as unethical but some areas of the world are still conducting these practices. Procurement professionals must be aware of any potential opportunities where fraud and corruption could present themselves.

Being offered money or gifts in return for a contract to be awarded is not uncommon in some areas of the world and buyers should always be aware of this situation and politely refuse any offers of financial or material benefits from suppliers. Some cultures may take offence in the refusal of acceptance of gifts so attention needs to paid to possible offerings and a plan made in advance to politely explain the reasoning for the refusal.

This simple definition table is a “go to” model to confirm the definitions of different types of illegal fraudulent activity that may occur at any point in the supply chain.