Examples Of Financial Statement Fraud

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Financial Statement Fraud Company financial statements provides information that is utilized by investors to evaluate the conduct of managers and to compose economic arrangements (Chinniah, 2015, p. 1). The consumers of the financial statement may consider the financial information received as dependable and appropriate for its function (p. 1). Chinniah indicates accounting standards and regulations have been put in place to try to certify the financial information provided is consistent with these standards, regulations, and is reliable and dependable for its consumers (p. 1). Nevertheless, as the world has seen in the past, employees, managers, or even stockholders could intentionally misrepresent the financial statements and change the …show more content…
Kostova describes financial statement errors as being unintentional inaccuracies, alterations, or discrepancies within the financial statement, which could include the oversight or admission of an amount such as a mistake within the gathering and processing of data, recording incorrect accounting estimates due to carelessness or misconception of facts, or an error in the function of accounting principles regarding the assessment, acknowledgement, organization, presentation, or disclosure (p. 358). In reference to financial statement fraud, Kostova notes that fraud refers to the intentional act of one or more company executives, management, or employees using deceit in order to advance arbitrary or unlawful compensations over company funds (p. 358). Since fraud is such a comprehensive legal notion, auditors tend to concentrate on fraud that leads to substantial inaccuracies, alterations, or differences of the financial statement (p. 358). Financial statement fraud consists of intentional inaccuracies, alterations, and differences, which include the oversight or discovery of amounts within the financial statements that aims to mislead users of the financial statements (p. 359). Kostova indicates, financial statement fraud can occur by manipulation, counterfeiting, or the alteration of financial records and information, by providing deceptive information about events, transactions, or other considerable information or the intentional omission within the financial statement, or the intentional misapplication of accounting principles could take place, in regards to the amounts, classification, presentation, and disclosure of information (p.

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