Certified Fraud Examiner Practice 2026 - Free Practice Questions and Study Guide

Management fraud is generally considered riskier compared to employee fraud due to several key factors. Management has greater access to information, resources, and the ability to influence financial reporting and internal controls. They can manipulate the organization's financial statements or misappropriate assets in ways that are often concealed from oversight and detection.

Additionally, management typically has a more significant capacity to override existing controls, making it easier for them to perpetrate and sustain fraudulent activities over time. Since they are in positions of authority, their actions can create a false sense of security, leading to a lack of scrutiny that can allow fraud to persist longer without detection.

While employee fraud can certainly be damaging and carries its own risks, the scale, impact, and concealment potential of management fraud enhance the risk associated with it. Therefore, understanding the distinct risks related to different levels of staff within an organization is critical for effective fraud prevention and detection strategies.