（2009）An Analysis of Financial Statement Fraud at the Assertion Level.pdfVIP

AN ANALYSIS OF FINANCIAL STATEMENT FRAUD AT THE ASSERTION LEVEL Isabel Wang ANU College of Business and Economics, The Australian National University, Canberra, Australia Isabel.wang@.au Renee Radich Department of Accounting and Finance Division of Economic and Financial Studies, Macquarie University, Sydney, Australia rradich@.au Neil Fargher ANU College of Business and Economics, The Australian National University, Canberra, Australia neil.fargher@.au First draft: February , 2009 Final draft: December, 2009 We gratefully acknowledge the helpful suggestions from James Hazelton, Gary Monroe, Phil Ross and participants at the AFAANZ conference 2009. AN ANALYSIS OF FINANCIAL STATEMENT FRAUD AT THE ASSERTION LEVEL SUMMARY: This study investigates which assertions tend to be violated when management issues fraudulent financial statements. Using a sample of companies with alleged involvement in accounting manipulations as documented in Accounting and Auditing Enforcement Releases issued by the Securities and Exchanges Commission, the results suggest that the occurrence and cutoff assertions are the major assertions at risk for revenue transactions and accuracy for expense transactions. We present evidence that violations of the occurrence