F raud by top managers has become a worldwide problem. Major scandals have rocked the U.S. (e.g., Enron Corp., Fannie Mae, Global Crossing and WorldCom Inc.), drawing attention to the serious consequences of fraud, not only for companies but also for their employees, communities and society at large. But fraud by top management is not just a U.S. problem; Asian, European, Latin American, African and Australian companies also have been afflicted. Revelations of such fraud have been alarming across the political and ideological divide. After all, how can well paid and highly respected senior executives develop such elaborate schemes to defraud the very people who invested in their companies? What would lead successful and accomplished senior executives to lie for money and jeopardize their honor, reputations and careers? Moreover, revelations of fraud by senior executives have made many wonder: How can these crimes be committed and persist for years in spite of external audits by professional companies and monitoring by boards of directors? What can be done to reform corporate governance and to instill a strong ethical perspective among top managers? In this paper, we discuss different types of fraud by top managers and link them to various classes of white-collar crime. We then identify key societal, industry, organizational and individual characteristics that contribute to such behaviors. Next, we highlight the various societal, industry and organizational effects of top management fraud. WHAT IS TOP MANAGEMENT FRAUD?