FinTech Glossary

What is Embezzlement

Embezzlement usually occurs over time rather than as a single event. It often involves concealing transactions or manipulating records to hide misuse.

Typical methods include:

• Falsifying expense claims or receipts
• Diverting vendor payments to personal accounts
• Creating fake vendors or invoices
• Misusing corporate cards or company funds
• Altering accounting records to cover gaps

Lack of internal controls, poor oversight, and limited visibility into transactions increase the risk.

Business Context

Embezzlement commonly occurs in workplaces, financial institutions, non-profits, or any organisation where employees or partners handle money, payments, or financial records.

It often involves internal actors such as employees, managers, or contractors rather than external criminals.

• Common risk areas include:
• Cash handling and petty cash
• Vendor payments and reimbursements
• Payroll and expense claims
• Procurement and purchase approvals
• Weak approval or monitoring systems

Embezzlement can lead to financial loss, legal action, reputational damage, and breakdown of internal trust.

How Embezzlement Happens

Embezzlement usually occurs over time rather than as a single event. It often involves concealing transactions or manipulating records to hide misuse.

Typical methods include:

1. Falsifying expense claims or receipts
2. Diverting vendor payments to personal accounts
3. Creating fake vendors or invoices
4. Misusing corporate cards or company funds
5. Altering accounting records to cover gaps

Lack of internal controls, poor oversight, and limited visibility into transactions increase the risk.