Checklist of Accounting Fraud: How Fraud Occurs-Understating Liabilities / Expense Fraud

Example of such Accounting Fraud

AREAS AND COMMON METHODS USED TO FRAUD

Enron

AREA: UNDERSTATING LIABILITIES/EXPENSE FRAUD

• Not recording accounts payable
• Not recording accrued liabilities
• Recording unearned revenues as earned
• Not recording warranty or service liabilities
• Not recording loans or keep liabilities off the books
• Not recording contingent liabilities