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Financial Statement Fraud - Coggle Diagram
Financial Statement Fraud
Definition :The deliberate misrepresentation of the financial condition of an enterprise
Intentional misstatement
omission of amounts or
disclosures
Forms
Understated liabilities and expenses
Overstated assets or revenue
Five Classifications of Financial Statement Schemes
Improper asset valuations
Accounts Receivable
Inventory valuation
Timing Differences
Premature revenue recognition
Long-term contracts
Recording expenses in the wrong period
Fictitious revenues
Concealed liabilities and expenses
Improper disclosures
Subsequent events
Management fraud
Contingent liabilities
Related-party transactions
Accounting changes
Financial Statement Analysis
Vertical analysis
expressing components as percentages of a
specified base value within the statement being analyzed
Horizontal analysis
analyzing the percentage change in individual financial
statement line items from one accounting period to the next
Ratio analysis
measuring the relationship between any two different
financial statement amounts