Financial Statement Fraud Course

When the managers of a company provide false financial information, it's called financial statement fraud. Financial statement fraud is usually committed with the intention of making financial gains, such as using the false information to increase the value of the company's stock and deceiving unsuspecting investors, lenders, tax authorities and governments.
Financial statement fraud is the most costly type of fraud committed at companies. Although financial statement fraud is present in only about 10% of internal fraud cases, the median cost of a financial statement fraud is $2 million.

Learning Objectives:

At the end of this session, participants will be able to:

• Identify the most common ways financial statements are fraudulently manipulated;
• Recognize some of the common red flags of financial statement fraud;
• Explain why traditional independent audits fail to detect fraud most of the time

Course Outline:

• Revenue overstatement, Understating expenses, Overstating assets, Understating liabilities
• Improper use of reserves, Mischaracterization as "one-time" expenses, Misapplication of accounting rules
• Misrepresentation or omission of information, Why Financial Statement Audits don't find fraud
• Fictitious revenues
• Fabricating revenue
• Inadequate provisions for sales and returns
• Sales with conditions
• Timing differences
• Early revenue recognition
• Recording expenses in the wrong period
• Concealed liabilities and expenses
• Liability and/or expense omission
• Omission of warranty and product liability
• Improper disclosures
• Liability omissions
• Significant events
• Management fraud
• Related-party transactions
• Changes in accounting policy
• Improper asset valuations
• Inventory
• Accounts receivable
• Fixed assets
• Business combinations