e-journal

Misrepresentation of financial statements

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Purpose – The purpose of this paper is to show the public, in general, and auditors, in particular, that
in the absence of control there is always a risk of fraud. Fraud can be done in various forms. Larceny
may be the most obvious case of fraud, but fraud may be done in many other ways too. Balance sheet
fraud or financial statements fraud is a broader issue; it is far-fetched than a few hundred dollars of a
larceny case. In financial statement fraud, the deep down effect may be millions or billions of dollars.
Design/methodology/approach – The paper has been designed based on a fraud theory. The author
has observed the implications of a possible fraud in a real audit case. The fraud theory has been tested
through financial analysis and audit tests. The theory has then been revised and the existence of a
financial statement fraud has been proven.
Findings – The paper explores that banks and group companies controlled by unreliable owners can
lead to misuse of public’s funds in accordance with the directives of the owner. Public’s money can be
transferred to other group companies in an illegal manner – in excessive amounts – and never returned
to the bank by means of applying different accounting fraud techniques.
Research limitations/implications – Auditors, who may audit group companies that include a
bank or banks with deposit receiving and lending rights, should pay attention to the transactions
between the group’s bank and the other group companies. The lending may be excessive in amount
and/or never paid back and the financial statements would be misrepresented covering various fraud
schemes.
Originality/value – The case that the paper deals with reflects the author’s own audit experiences.
The names of the companies have been changed but not the essence of the events. From this perspective,
it sheds light onto the path of an auditor who happens to be in a similar situation.

Keywords Fraudulent representation, Interest capitalization

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Ketersediaan

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Informasi Detail

Judul Seri

Journal of Financial Crime

No. Panggil

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Penerbit

: Emerald Group., 2014

Deskripsi Fisik

Journal of Financial Crime Vol. 21 No. 2, 2014 pp. 215-225

Bahasa

English

ISBN/ISSN

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Klasifikasi

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Tipe Isi

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Tipe Media

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Tipe Pembawa

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Edisi

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Subjek

AKUNTANSI

Info Detail Spesifik

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Pernyataan Tanggungjawab

Asmawati/Syahrial

Versi lain/terkait

Lampiran Berkas

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