•• Manipulating, forgery, alteration or falsification of accounting records or supporting documents from which financial statements are prepared.
•• Misappropriation of company assets e.g. using a company vehicle for private undertakings, stealing physical assets and embezzling receipts.
•• Misapplication of accounting policies e.g. classifying a capital expenditure and revenue expenditure.
•• Inappropriate adjusting assumptions and changing judgments used to estimate account balances. E.g. the management may insist on providing a 5% provision for bad and doubtful debts even where past debt collection history shows that the actual default rate is about 15%.
•• Suppression or omission of effects of a transaction on accounting record e.g. placing a genuine debtor well known bad debts in the balance sheet thus misrepresenting the financial position of the company.
Wilfykil answered the question on April 11, 2019 at 12:27
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