Types of Financial Statement Fraud - Key Schemes and How They Are Carried Out
Author: Kelen Camehl
| CPE Credit: |
4 hours for CPAs |
This course provides an overview of the various forms of financial fraud and manipulation that can distort financial statements and mislead stakeholders. It addresses tactics used by some companies to artificially inflate revenue, understate liabilities, mismanage assets, and misreport disclosures. By understanding these fraudulent practices, auditors can better identify these types of frauds and ensure more accurate and transparent financial reporting for stakeholders.
Publication Date: March 2025
Topics Covered
- Revenue and Earnings Manipulation
- Expense and Liability Fraud
- Asset and Equity Mismanagement
- Disclosure and Reporting Fraud
Learning Objectives
- Identify common methods of manipulating revenue and earnings in financial statements
- Recognize indicators of inflating earnings with non-recurring items and overstating deferred revenue
- Explain how to distinguish between legitimate and fraudulent journal entries
- Recognize indicators of backdating transactions and how they can impact financial reporting
- Identify fraudulent activities that involve understating expenses and liabilities in financial statements
- Recognize common schemes for misclassifying financial statement items and manipulating reserves
- Explain how to distinguish between legitimate and fraudulent lease classifications under accounting standards
- Identify fraud schemes that involve overstating assets and manipulating equity
- Recognize fraud indicators related to depreciation, amortization, and stock option accounting
- Explain how to differentiate between legitimate and fraudulent related party transactions
- Identify indicators of misleading disclosures and misreporting of foreign currency transactions
- Recognize red flags indicating failure to disclose contingent liabilities
- Explain how to distinguish between legitimate and fraudulent consolidation practices
Level
Overview
Instructional Method
Self-Study
NASBA Field of Study
Auditing (4 hours)
Program Prerequisites
None
Advance Preparation
None
