Types of Financial Statement Fraud: Key Schemes and How They Are Carried Out (Course Id 2521)

This course provides an overview of the various forms of financial fraud and manipulation that can distort financial statements and mislead stakeholders. It addresses tactics used by some companies to artificially inflate revenue, understate liabilities, mismanage assets, and misreport disclosures. By understanding these fraudulent practices, auditors can better identify these types of frauds and ensure more accurate and transparent financial reporting for stakeholders.

Please Note: These Fraud CPE credits satisfy the California Board of Accountancy (CBA) fraud requirement.

Chapter 1
Revenue and Earnings Manipulation

• Identify common methods of manipulating revenue and earnings in financial statements
• Recognize indicators of inflating earnings with non-recurring items and overstating deferred revenue
• Distinguish between legitimate and fraudulent journal entries
• Recognize indicators of backdating transactions and how they can impact financial reporting

Chapter 2
Expense and Liability Fraud

• Identify fraudulent activities that involve understating expenses and liabilities in financial statements
• Recognize common schemes for misclassifying financial statement items and manipulating reserves
• Distinguish between legitimate and fraudulent lease classifications under accounting standards

Chapter 3
Asset and Equity Mismanagement

• Identify fraud schemes that involve overstating assets and manipulating equity
• Recognize fraud indicators related to depreciation, amortization, and stock option accounting
• Differentiate between legitimate and fraudulent related party transactions

Chapter 4
Disclosure and Reporting Fraud

• Identify indicators of misleading disclosures and misreporting of foreign currency transactions
• Recognize red flags indicating failure to disclose contingent liabilities
• Distinguish between legitimate and fraudulent consolidation practices