What type of fraud is considered the second most common according to the definitions provided?

Corruption is considered the second most common type of fraud because it involves dishonest behavior by individuals in positions of authority, such as employees or executives, where they exploit their role for personal gain. This can manifest in various ways, including bribery, kickbacks, and conflicts of interest, often taking advantage of their ability to influence company decisions or operations.

This type of fraud often arises in environments where there are insufficient controls or oversight, allowing individuals to access resources and engage in unethical behavior without being immediately detected. Given its prevalence in both private and public sectors, recognizing corruption is crucial for organizations looking to maintain integrity and transparency in their financial practices.

The other types of fraud listed—occupational fraud, payment fraud, and vendor fraud—while serious and impactful, do not represent the same level of systemic risks associated with corruption, which often undermines trust and can influence broader organizational culture and efficiency.