Financial Reporting Fraud Cases Paper
Adley – Week1 DQ1 Follow up Reply
Financial reporting fraud cases typically involve “fictitious revenues, overstatement if assets, capitalized expenditures, misappropriation of assets, premature revenues, and understatement of expenses and liabilities, “according to Lawyers Connect (n.d). As a result, such intentional misstatements are fraudulent and illegal, and most likely material. Manipulation of accounting equation, Assets = Liabilities + Stockholder’s Equity (Rich, et al., 2012, p. 9), characteristically engages the misapplication of the revenue recognition and matching principles. For example, Bally Total Fitness inflated stockholder equity by premature recognition of income from membership contracts and delaying expenses (p.112). Forensic accountant, Tracy Coenen (2010) suggests fraud is more difficult to detect when the perpetrator avoids any hint of impropriety concerning the balance sheet.
Predictably, money is by far the prime mover of fraudulent activity, involving bonuses, promotions, and stock …show more content…
(2010). Koss Corp: Commit the Fraud and Cover It Up. Sequence Inc./Fraud Files Blog. Retrieved from http://www.sequenceinc.com/fraudfiles/2010/01/koss-corp-commit-the-fraud-and-cover-it-up/
FraudBasics. (2003 November/December). Fraud Magazine. Retrieved from http://www.fraud-magazine.com/article.aspx?id=4294967876
Lawyers Connect (n.d). Financial Statement Fraud: FAQs. Retrieved from http://www.excite.com/ education/lawyers/financial-statement-fraud
Rich, J., Jones, J., Heitger, D., Mowen, M., & Hansen, H. (2012). Cornerstones of Financial & Managerial Accounting. Mason, OH: South-Western/Cengage Learning.
U.S. Securities and Exchange Commission. (1999). Staff Accounting Bulletin No. 99 - Materiality. Retrieved from http://www.sec.gov/interps/account/sab99.htm
Verschoor, C. (2012, September 5). Has sox been successful? AccountingWeb. Retrieved from
Financial reporting fraud cases typically involve “fictitious revenues, overstatement if assets, capitalized expenditures, misappropriation of assets, premature revenues, and understatement of expenses and liabilities, “according to Lawyers Connect (n.d). As a result, such intentional misstatements are fraudulent and illegal, and most likely material. Manipulation of accounting equation, Assets = Liabilities + Stockholder’s Equity (Rich, et al., 2012, p. 9), characteristically engages the misapplication of the revenue recognition and matching principles. For example, Bally Total Fitness inflated stockholder equity by premature recognition of income from membership contracts and delaying expenses (p.112). Forensic accountant, Tracy Coenen (2010) suggests fraud is more difficult to detect when the perpetrator avoids any hint of impropriety concerning the balance sheet.
Predictably, money is by far the prime mover of fraudulent activity, involving bonuses, promotions, and stock …show more content…
(2010). Koss Corp: Commit the Fraud and Cover It Up. Sequence Inc./Fraud Files Blog. Retrieved from http://www.sequenceinc.com/fraudfiles/2010/01/koss-corp-commit-the-fraud-and-cover-it-up/
FraudBasics. (2003 November/December). Fraud Magazine. Retrieved from http://www.fraud-magazine.com/article.aspx?id=4294967876
Lawyers Connect (n.d). Financial Statement Fraud: FAQs. Retrieved from http://www.excite.com/ education/lawyers/financial-statement-fraud
Rich, J., Jones, J., Heitger, D., Mowen, M., & Hansen, H. (2012). Cornerstones of Financial & Managerial Accounting. Mason, OH: South-Western/Cengage Learning.
U.S. Securities and Exchange Commission. (1999). Staff Accounting Bulletin No. 99 - Materiality. Retrieved from http://www.sec.gov/interps/account/sab99.htm
Verschoor, C. (2012, September 5). Has sox been successful? AccountingWeb. Retrieved from