Checklist of Accounting Fraud: How Fraud Occurs- Overstating Assets

November 16th, 2009 Comments off
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Example of such Accounting Fraud

AREAS AND COMMON METHODS USED TO FRAUD

WorldCom

 

AREA: OVERSTATING ASSETS

  • Overstatement of current assets (e.g. marketable securities)
  • Overstating pension assets
  • Capitalizing as assets amounts that should be expensed
  • Failing to record depreciation/amortization expense
  • Overstating assets through mergers and acquisitions
  • Overstating inventory and receivables

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Financial Accounting

 
 

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