fake account

Modern Frauds in Accounting

Fraudulent accounting practices are used by companies to misrepresent their financial positions and influence market perception of their stocks. Accounting frauds are among the top economic crimes of the 21st century. Different Accounting frauds are used by organization to manipulate its financial statements as per their benefits.TheExamples of accounting frauds include false reporting of revenue, creative accounting, fraudulent financial reporting, related party transaction, etc.

False Reporting of Revenue

False reporting of revenue is one of the most common forms accounting fraud.In order to increase its net profit, company re-categorize its expenses as revenue items, record them as sales figure or delay recording of expenses till the subsequent period.False reporting of revenue can take many forms, such as recording sales which are not yet made.

Creative Accounting

Creative accounting is a different technique for manipulation of the numbers in financial statements so as to present a more favourable financial position of the company. Creative accounting techniques include capitalizing expenses, accelerating the recognition of income, changing valuation of assets or liabilities etc. Creative accounting sometimes results an economic advantage to the company.

Fraudulent Financial Reporting

Fraudulent financial reporting is used to intentionally misstate, adjust or omit significant accounting reports to give an incorrect impression of the performance, financial condition or operation of a company.It also includes creation of false documents.

Related Party Transaction

Related party transaction is amongst the most complicated form of accounting frauds. It occurs when an entity has two or more relationships in multiple businesses. Company executives enter into these type of transactions in order to gain some unfair economic advantage.

Conclusion

It is hence important for educated people to provide understanding about the frauds and provide them with tools and teaching to help identify signs of accounting fraud in order to protect their hard earned money from the financial manipulators. Awareness of frauds in Accounting will help to preserve financial integrity and stability of organizations. Also there are various laws and organizations that help to protect the assets and financial rights of organizations and its stakeholders.

Malingering is a form of deception where someone pretends to have a physical or mental illness they do not really have in order to obtain some kind of obvious gain, such as avoiding military duty, obtaining financial compensation, avoiding criminal prosecution, getting lighter sentences, or obtaining drugs. It has been estimated that three to twenty percent of all referrals for psychological or psychiatric evaluation involve the possibility of malingering.

Malingering can be difficult to detect. People who are malingering may present symptoms that seem real and consistent with legitimate medical or psychiatric conditions, but a thorough physical and psychological evaluation can help to identify malingering behaviors. It’s important to identify malingering as accurately and quickly as possible, because it can have serious legal, social, and financial implications.

Some of the signs that can suggest malingering include presenting exaggerated symptoms, inconsistent medical histories, unwillingness to undergo medical examination, reluctance or refusal to undergo psychological testing, fabrication or manipulation of test results, and dramatic or exaggerated behavior. Common behaviors brought up in a clinical setting that may suggest malingering include presenting a limited range of symptoms and changing symptoms or physical findings in order to receive a greater degree of support or to avoid responsibility.

When it is determined that a person is malingering, therapies and treatments are usually not beneficial, and, in some cases, can become an additional burden on resources. Instead, malingering can be addressed with education and awareness, as well as specific techniques designed to evaluate each situation on a case-by-case basis.