Video: Fraud and Constructive Fraud

In this lesson, Nick Palazzolo, CPA, dives into the nuanced differences between fraud and constructive fraud, shedding light on the serious legal implications of each within the accounting profession. He systematically breaks down the composition of fraud, stressing the necessity of malicious intent, material misrepresentation, and the intent to deceive for it to be considered fraud. Moving further, Nick clarifies the concept of constructive fraud, highlighting its relation to gross negligence as opposed to intentional deceit and walks through a real-world scenario to illustrate how CPA liability can arise through such recklessness. Through detailed explanation, he ensures a comprehensive understanding of these critical concepts, which are not only pertinent in the context of legal implications but also as cardinal knowledge for the realm of business law.