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Fraudulent Financial Reporting Essay

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THEFT AND FALSE ACCOUNTING A person who makes or participate in making an entry which is or may be false, misleading or deceptive in a material specific, or who delete or concur in deleting or omitting a particular material, is treated as falsifying the account or document. It also means to destroy dishonestly, deform or erase, conceal any account or record or document which is made for any accounting objective or purpose, with a view to gaining for someone or oneself or with intention to cause loss to another.
Fraudulent financial reporting can usually be laid to the existence of situation or conditions in either the internal environment of the business, or in the external environment. Excessive unrealistic pressure on management, such as making huge profit or other performance objectives, all …show more content…

The revenue recognition principle tells that revenue is recognized only when the payoff and benefits associated with the items being sold or services being provided, where the amount can be estimated reliability and when the amount is regained or retrieved. (7)
This is the accounting principle related to this situation where the revenue should be recorded when it is earned which is in January, but Salem made a fraudulent misleading action violating the rules of GAAP, giving a false Debt Ratio, and a false financial statement. It is totally unethical action from my point of view.
“Management financial statement fraud is a very pertinent topic within the field of business ethics that concern public accountants in particular. Statement of Auditing Standards requires an auditor specifically to assess the risk of material misstatement due to fraud and defines fraud as two types of intentional material misstatement of the financial statements: fraudulent financial reporting and misstatements arising from misappropriation of assets”. (Nancy Uddin, Journal Of Business Ethics, 2002)
CASE 4.
WHAT IS FINANCIAL STATEMENT

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