Agritrade former CFO gets 20 years jail for deceiving 16 financial institutions
#Financialstatement fraud occurs when corporations misrepresent or deceive investors into believing that they are more profitable than they actually are.
Although financial statement #fraud is the least common type of #fraud in the corporate world, #accounting for only 10% of detected cases. But when it does occur, it is the most costly type of crime be it for personal gain, or just trying to keep the business afloat.
Unsurprisingly, many people commit financial-statement fraud for personal gain.
If their bonus depends on how much revenue their department brings in, it's in their self-interest to inflate revenue on the income statement. If company performance was poor, upper management may keep the owners happy by producing false financial statements to say otherwise.
Business owners may manipulate the accounts to make the company look healthier to investors or lenders. They can do this by either inflating income and asset values or underplaying the company's debts and liabilities.