Financial Statement Fraud - University of Dayton财务报表舞弊-戴顿大学.pptVIP

Fraudulent Financial Statement Schemes Pop Quiz Name at least three of the five principle financial statement fraud schemes. ? Financial Statement Fraud Defined Deliberate misstatements or omissions deceive users Specifically Falsification, alteration, or manipulation Material intentional omissions or misrepresentations Deliberate misapplication of accounting principles, policies, and procedures Intentional omissions of or inadequate disclosures or presentation Costs I More than 50% of U.S. corporations are victims of fraud with losses of more than $500,000 Investors, employees, pensioners Enron, WorldCom, Quest,Global Crossing, and Tyco’s What might some other fraud costs be? Costs II Financial reporting process undermined Integrity of auditing profession Capital markets lose confidence Capital markets less efficient Costs III Economic growth and prosperity Litigation costs Destroys careers Bankruptcy or substantial economic losses Costs IV intervention Inefficiency Doubts re: audits Public confidence and trust Types Fictitious revenues Timing differences Improper asset valuations Concealed liabilities and expenses Improper disclosures Fictitious Revenues Fake sales, customers Legitimate customers Conditional sales Red Flags – Fictitious Revenues Rapid growth unusual profitability Negative CFO with positive NI Related party/SPE transactions Red Flags – Fictitious Revenues Complex transactions ↑ number of days’ sales in receivables Sales to unknown entities An unusual surge in sales Timing Differences Improper periods Shifting revenues or expenses Matching revenues with expenses Premature revenue recognition Long-term contracts Channel stuffing Red Flags – Timing Differences Rapid growth or unusual profitability Negative CFO with positive NI Complex transactions ↑ number of days’ sales in receivables ↓ number of days’ purchases in accounts payable Concealed Liabilities Liability/expense omissions Capitalized expenses Warranties Contingencies Red Fl