stevenwang78: What is the accounting fraud?

Accounting fraud is an intentional and unauthorized manipulation of the recognition of revenue from the sale and/or cost to make a firm profit results appear better than it actually is. Some things that companies make that fraud can form is:

--There is no mention of prepaid expenses and other non-recurring assets

--Not showing certain classifications of short-term receivables and liabilities

--The collapse of the debt in the short-and long-term, in an amount.

If you are recording the income from the sale is the most common technique for accounting fraud. A company can deliver products to customers as they have not yet ordered, to know that these customers products by the end of the year will be returning. Until the returns are made, the company registers as if they were actual sales shipments. Or a company can conduct channel stuffing. It delivers products to dealers or final customers that they really don't want to, but companies do business on the side that offer incentives and special privileges as resellers or customers shall not be entitled to oppose the early acquisition of products. A company can also immediately register the products returned from clients in order to prevent these displacements of sale proceeds to recognize within the current year

Other ways to the company's accounting fraud of recording costs, such as the non-inclusion of depreciation expense. Or a company may not want a list of all of the cost of goods sold, the cost of the sale at a time. This would be the higher gross margin, but the company's inventories would cover products that are not in stock, because they have been delivered to customers.

A company can also do not want to include asset losses should be recognised as uncollectible accounts receivable, or it might not make a note of the stock falls below the lower of cost or market rule. A company may not even mention the full amount of the liability on the part of the last, to make those responsible undervalued in the balance sheet of the company. Its profit, would therefore be overestimated.

stevenwang78

Monday, February 14, 2011

What is the accounting fraud?

No comments:

Post a Comment