Tax Law Term “Accounting Fraud“
Accounting fraud cases, involving accounting misrepresentations, have increased substantially in the last few years, resulting in millions of dollars of fines imposed by the Securities and Exchange Commission. Such financial misstatements and fraud usually involve an effort to cook the books of a company and thereby deceive the stockholders and investors. Accounting fraud includes a knowing misrepresentation of the truth or concealment of a material fact with respect to the accounting records and statements of a company.
Fraudulent financial reporting is also known as earnings management fraud. In this context, management intentionally manipulates accounting policies or accounting estimates to improve financial statements. Wikipedia
Accounting fraud is intentional manipulation of financial statements to create a facade of a company’s financial health. It involves an employee, account or the organization itself and is misleading to investors and shareholders. A company can falsify its financial statements by overstating its revenue or assets, not recording expenses and under-recording liabilities. Investopedia