FinancialStatementFraud - Financial Statement Fraud...

Info iconThis preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
Financial Statement Fraud Hanna C Quffa
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Name at least three of the five principle financial statement fraud schemes. Pop Quiz
Background image of page 2
Financial Statement Fraud Defined Deliberate misstatements or  omissions of amounts or disclosures  of financial statements to deceive  financial statement users,  particularly investors and creditors
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Defining Financial Statement Fraud Falsification, alteration, or manipulation of material financial  records, supporting documents, or business transactions Material intentional omissions or misrepresentations of events,  transactions, accounts, or other significant information from  which financial statements are prepared Deliberate misapplication of accounting principles, policies, and  procedures used to measure, recognize, report, and disclose  economic events and business transactions Intentional omissions of disclosures or presentation of  inadequate disclosures regarding accounting principles and  policies and related financial amounts 
Background image of page 4
Costs of Financial Statement Fraud More than 50% of U.S. corporations are victims of fraud  2001) Enron lost about $70 billion in market capitalization to  investors, employees, and pensioners Enron, WorldCom, Quest, Global Crossing, and Tyco’s  loss to shareholders was $460 billion (Cotton 2002) Other fraud costs  are legal costs, increased insurance  costs, loss of productivity, adverse impacts on employee  morale, customers’ goodwill, suppliers’ trust, and  negative stock market reactions
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Frequency of Types of Occupational Fraud and Abuse 85.7% 92.7% 12.8% 30.1% 5.1% 7.9% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Asset Misappropriation Corruption Fraudulent Statements 2002 2004
Background image of page 6
Median Loss of Types of Occupational Fraud and Abuse $80,000 $93,000 $530,000 $250,000 $4,250,000 $1,000,000 $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 Asset Misappropriation Corruption Fraudulent Statements 2002 2004
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Effects of Financial Statement Fraud Undermines the reliability, quality, transparency,  and integrity of the financial reporting process Jeopardizes the integrity and objectivity of the  auditing profession, especially auditors and  auditing firms Diminishes the confidence of the capital  markets, as well as market participants, in the  reliability of financial information Makes the capital markets less efficient
Background image of page 8
Effects of Financial Statement Fraud Adversely affects the nation’s economic growth  and prosperity Results in huge litigation costs Destroys careers of individuals involved in  financial statement fraud.  Causes bankruptcy or substantial economic  losses by the company engaged in financial  statement fraud
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 53

FinancialStatementFraud - Financial Statement Fraud...

This preview shows document pages 1 - 10. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online