These Financial Statement Frauds Can Happen In Companies

Based on the Association of Certified Fraud Examiners (ACFE), Fraud is one of the unlawful acts, which is done intentionally with a specific purpose, such as manipulation or making false financial statements to other parties. This activity is usually carried out by individuals from within or outside the company with a view to obtaining personal or group benefits that harm other parties directly or indirectly. Therefore, if you want to avoid frauds regarding financial statements, we suggest you hire the trustworthy BAS Agent Rydalmere.

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There are 3 Types of Fraud Based on the Association of Certified Fraud Examination (ACFE), such as:

1. Fraudulent Financial Statements

It is an action taken by management to cover up the company’s financial condition which actually does not apply the priority scale of the financial statements even to manipulate the presentation of financial statements with the aim of obtaining personal benefits related to their position and responsibilities.

2. Asset Misuse Fraud

Fraud misappropriation of assets includes embezzlement, theft of company property which we usually call fixed assets by internal and/or external parties. This fraud has tangible nature so it is easy to calculate and measure in its disclosure. This cheating is the most common type of cheating. As an example of the occurrence of a doubling of the purchase price of an asset or what is commonly called a price increase, asset purchases that never happened, or theft of assets.

3. Corruption

This type of fraud is the most difficult to investigate because it involves cooperation with other parties or commonly called collusion. Some types of corruption include bribery, gratification (illegal acceptance) with examples of gifts related to position and authority. Due to pressures in the form of expectations of management achievements, financial statement fraud also occurred with the aim of fooling investors and creditors by raising the value of assets and recognizing revenues and conversely lowering the value of liabilities and other costs.