Financial Statement Manipulation: Schemes, Warning Signs and Journal Entry Testing
How results are 'cooked', five common schemes with the audit response, the warning signs, and how to test journal entries.
Guides · editable Word · 6 pages · ₹149 / $1.49 · lifetime access, up to 5 downloads
Understand how financial results can be manipulated and where internal audit should focus. The guide explains why management might manipulate results and how it gets into the numbers, then describes five common schemes (revenue recognition, profits created in consolidation, inventory valuation, supplier rebates and marketing support, contract and asset losses), each with an example and the audit response. It covers the warning signs of accounting errors and aggressive accounting, and sets out the steps to test journal entries and the features of high-risk entries. Written for readers who know basic accounting but have little fraud experience. Editable Word, 6 pages.
What's inside
- About this guide
- Key terms explained
- 1. How manipulation gets into the numbers
- Why management might manipulate results
- 2. Common schemes
- 3. Warning signs
- 4. The main method: journal entries
Topics: Fraud and Ethics · Accounting
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Learn Internal Audit is run by SKYBOT Technology LLP. The founders, Amit Salla and Zehra Maccawala, are partners at ZMAS and Associates, a Chartered Accountancy firm specialising in internal audit.