Fraud Associated With Manual Cash Disbursements

Companies typically have a standard way of initiating cash disbursements like payments to vendors or employees. Often this involves entering an invoice into the accounting system, ensuring proper approval for payments, and then generating the electronic transfer or check. Sometimes invoices are entered at scheduled intervals and payments are issued …

Judgment of Management and Financial Statement Fraud

With thousands of detailed accounting rules, how can there be financial statement fraud? There are areas of the financial statements that rely heavily on the judgment of management. They make estimates and decide how to apply the accounting rules. This leaves the door wide open for abuse. Many accounting entries …

Questions to Ask When Starting a Fraud Investigation

In order to properly plan a fraud investigation, a fraud examiner needs to be able to ask good questions that extract valuable information about what needs to be done. The specific questions vary with each investigation, but the following are some basic areas that an investigator should strongly consider exploring. …

Is It “Creative Accounting” or Fraud?

Companies engaged in financial statement fraud sometimes use creative phrases to legitimize or cover up what they’re doing. Examples include: Aggressive accounting – We’re following the rules, but pushing the limits to make the financial statements look as good as possible. Earnings management – We’re doing our best to “manage” …