Financial Statement Fraud Case Study

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Register to read the introduction… Discuss typical Financial Statement Fraud.
Financial statement fraud is the manipulation/falsification of the information used to prepare financial statements; that will be released to the public. The manipulation of those statements allows businesses to look attractive to investors and creditors. The majority of these frauds fall into two major
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Also Expenses are recorded in later period decreasing the expenses for the current period. * Falsifying Entries: For falsifying entries, a company will enter transactions that seem to affect it accounts receivable, but when the whole transaction is considered, they do not create any gain. For example, non-revenue gains may be recorded as sales. Investment income, gains on the sale of assets will be recorded as sales revenue to make the core business appear healthy. Items like discounts and rebates from suppliers and other non-revenue injections of money from loans will also be recorded as sales. 3. Discuss common reasons why financial statement fraud is committed
Financial statement fraud is committed by individuals either by need or greed. For example, the following factors can trigger individuals or companies to falsify their financial statements thus committing fraud: * Personal pressure to pay for lifestyle and vices. * Employment pressure from contingent compensation structures, or management's financial
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And if they call them again, it would affect and hurts his business. “They would not want to have business with me anymore he says”. The auditor would stops checking the process because they do not want to be held accountable for his loss of customers/ business. He would also ask the auditor for some advice for his company and how to make the company better. He made the auditors feel good and put them in a respectful position, thus diverting their attentions from problem

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