Differentiate between fraud and corruption

On this page, we help students to answer the following question: “Differentiate between fraud and corruption.” This is an important distinction in the Life Orientation Grade 12 curriculum, particularly within the “Responsibility of the State” and “Democracy and Human Rights” modules.

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Quick Answer

Fraud vs. Corruption:

• Fraud: A deliberate deception or trick used to gain an unfair advantage or money (e.g., faking a qualification or a signature).
• Corruption: The abuse of power or position for personal gain (e.g., a government official accepting a bribe to award a contract).
• The Key Difference: Fraud is about lying or tricking, whereas corruption is about misusing authority.

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Understanding Fraud and Corruption

In the South African legal and ethical framework, both fraud and corruption are criminal activities that undermine the mandate for professional ethics. However, they involve different types of actions and motivations.

1. Defining Fraud

Fraud is a crime of “misrepresentation.” It happens when someone intentionally tells a lie or hides the truth to cheat another person or an organisation out of money, assets, or legal rights.+1

• In the School Context: A learner forging a parent’s signature on a report or faking a doctor’s note for an exam is committing fraud.
• In the Workplace: Submitting fake invoices or lying about qualifications on a CV to get a job.
• The Goal: To obtain a benefit through dishonesty.

2. Defining Corruption

Corruption is a broader term that involves the “misuse of entrusted power.” It almost always involves more than one person (e.g., a giver and a receiver).

• The Role of Authority: It happens when someone in a position of power (like a government official, a teacher, or a boss) uses that power for their own benefit instead of the public good.
• Examples: A official accepting a bribe to speed up a tertiary funding application or a policeman taking “lunch money” to ignore a traffic fine.
• The Goal: To obtain a benefit through the abuse of a position.

[Image: A Venn diagram showing that while fraud and corruption are different, they often overlap in criminal cases]

3. Key Differences at a Glance

Feature	Fraud	Corruption
Primary Act	Deception, lying, or trickery.	Bribery, extortion, or nepotism.
Parties Involved	Can be done by one person alone.	Usually involves an agreement between two or more parties.
Source of Power	Does not require a high position.	Requires the abuse of a specific role or authority.
Impact on Society	Causes financial loss to individuals or companies.	Leads to a negative impact on service delivery and erodes public trust.

4. Why This Matters for Grade 12 Learners

Understanding these differences helps learners navigate their transition to a new environment.

• Ethical Principles: It allows learners to identify when a social relationship is becoming a detrimental relationship due to illegal requests.
• Accountability: Knowing these terms ensures that learners can support activities to fight corruption in a holistic manner as they enter the workforce or higher education.

Reference for Students:

• Subject: Life Orientation Grade 12
• Topic: Responsibility of the State – Corruption and Fraud.
• Source: My Courses LO Task Guide