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Financial Statement Fraud - Essay Example
Author : mosciskisarai
Finance & Accounting
Pages 3 (753 words)
Revenue Recognition Fraud Name Instructor Name Revenue Recognition Fraud In many occasions, companies find themselves in situations where they have to record their financial statements in the respective books of accounts in order to enable auditing as well as predict their profitability…
Since the perpetrators of financial statement fraud may be outsiders who collaborate with certain account department employees, it is imperative for concerned organizations to carry out surprise financial audits regularly to detect and prevent any potential incidences of financial statement fraud. This paper focuses on revenue recognition fraud by examining the background, real-time incidence, detection, and statistics related to revenue recognition fraud. Background of revenue recognition fraud Commonly known as timing schemes or improper treatment of sales, this category of financial statement fraud is undeniably the most prevalent in many accounts departments of most corporations (Schrader & Toner, 2013). The revenue recognition fraud is normally a matter of the organization at large especially when the management has the intention of hiding some real figure from public and financial scrutiny for a good section of the financial year. The motivating factors for the management’s engagement in revenue recognition fraud may be due to a weak season where the organization predicts unimpressive financial prospects. ...
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