Question

Forensic Accounting and Fraud Examination - Second Edition: Chapter 7

What are five classifications for financial statement fraud?

Answer 1

Five Classification For Financial Statement frauds are:-

(a) Fictitious Revenues or Fabricated Revenues - It involve the recording of sales of goods or service that did not occur.

(b) Timing Differences - It refers to recording of revenues or expenses in improper periods. This can be done to shift revenues or expenses between one period and the next, increasing or decreasing earning as desired.

(c) Improper asset valuations - It represents a company's assets and portrays the assets in a more positive financial light.

(d) Concealed Liabilities and Expenses - It refers to understanding liabilities and expenses is one of the ways financial statements can be manipulated to make a company appear more profit.

(e) Improper Disclosure - It means the disclosure of private, controlled, or protected information to any person who does not have both the right and the need to receive the information...