Prevent Financial Deception
Combat the most costly type of fraud

Financial statement frauds are the least common but most costly type of frauds faced by businesses.

Financial statement fraud is the deliberate over/under statement of financial statement balances in many cases to make a company appear to be in better financial condition than it really to deceive a financial statement user.  Because opportunity is an important factor in fraud risk, financial statement fraud isn’t as accessible as misuse of assets, although the stakes can be much higher.

Financial Statement fraud caused a median loss of $800,000 for companies, according to the Association for Certified Fraud Examiners (ACFE).

 

Prevent

  • Set an appropriate tone at the top. Management should lead by ethical example.
  • Train employees through orientation and refresh at regular intervals. Ensure adequate communication so that every employee is aware of what activities constitute fraud, and what the consequences are.

Detect

  • Perform General Ledger verification.
  • Review transactions to look for unusual amounts, patterns, or fluctuations in financial records.
  • Inquire with individuals involved in the financial reporting process about inappropriate or unusual activity relating to the processing of journal entries and other adjustments.
  • Review accounting estimates for biases that could result in material misstatement due to fraud.

Inform

If you suspect Financial Statement fraud,