Which type of fraud is committed less frequently but results in greater financial loss?

Management level fraud is characterized by the involvement of individuals in key decision-making positions within an organization, such as executives and upper management. This type of fraud is typically more sophisticated and often involves manipulating financial statements, misusing company assets, or engaging in deceptive practices that can have far-reaching implications for the organization. The reason management level fraud leads to greater financial loss is that those in these positions have greater access to resources and the ability to influence or bypass internal controls, making it possible to execute large-scale fraudulent schemes that can significantly impact the company's finances.

In contrast, other types of fraud may occur more frequently but tend to yield smaller financial losses per incident. For instance, employee level fraud often involves lower-level staff and may consist of actions such as time theft or petty cash theft, which usually result in less substantial financial repercussions compared to the potentially massive losses that can stem from fraudulent activities orchestrated by upper management. Similarly, vendor fraud and cyber fraud can be serious but often involve distinct, less systematic approaches compared to the overarching strategies employed by individuals at the management level. Therefore, while these other fraud types are important concerns, management level fraud typically poses a greater risk in terms of financial loss per event.