{"product_id":"financial-statement-fraud-isbn-9781118301555","title":"Financial Statement Fraud","description":"\u003cb\u003eValuable guidance for staying one step ahead of financial statement fraud\u003c\/b\u003e  \u003cp\u003eFinancial statement fraud is one of the most costly types of fraud and can have a direct financial impact on businesses and individuals, as well as harm investor confidence in the markets. While publications exist on financial statement fraud and roles and responsibilities within companies, there is a need for a practical guide on the different schemes that are used and detection guidance for these schemes. \u003ci\u003eFinancial Statement Fraud: Strategies for Detection and Investigation\u003c\/i\u003e fills that need.\u003c\/p\u003e \u003cul\u003e \u003cli\u003eDescribes every major and emerging type of financial statement fraud, using real-life cases to illustrate the schemes\u003c\/li\u003e \u003cli\u003eExplains the underlying accounting principles, citing both U.S. GAAP and IFRS that are violated when fraud is perpetrated\u003c\/li\u003e \u003cli\u003eProvides numerous ratios, red flags, and other techniques useful in detecting financial statement fraud schemes\u003c\/li\u003e \u003cli\u003eAccompanying website provides full-text copies of documents filed in connection with the cases that are cited as examples in the book, allowing the reader to explore details of each case further\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eStraightforward and insightful, \u003ci\u003eFinancial Statement Fraud\u003c\/i\u003e provides comprehensive coverage on the different ways financial statement fraud is perpetrated, including those that capitalize on the most recent accounting standards developments, such as fair value issues.\u003c\/p\u003e  \u003cp\u003eForeword xiii\u003c\/p\u003e \u003cp\u003ePreface xvii\u003c\/p\u003e \u003cp\u003eAcknowledgments xxi\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART I REVENUE-BASED SCHEMES 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1 Introduction to Revenue-Based Financial Reporting Fraud Schemes 3\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRevenue Recognition Principles 3\u003c\/p\u003e \u003cp\u003eChanges Proposed by FASB and IASB 5\u003c\/p\u003e \u003cp\u003eOverview of Revenue-Based Schemes 6\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 Timing Schemes 9\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAlteration of Records 9\u003c\/p\u003e \u003cp\u003eShipping Schemes 10\u003c\/p\u003e \u003cp\u003ePercentage of Completion Schemes 12\u003c\/p\u003e \u003cp\u003eImproper Estimates of Revenue Recognition Period 15\u003c\/p\u003e \u003cp\u003eMultiple-Element Revenue Recognition Schemes 17\u003c\/p\u003e \u003cp\u003eCustomer Loyalty Programs 22\u003c\/p\u003e \u003cp\u003eChannel Stuffing 24\u003c\/p\u003e \u003cp\u003eBill and Hold Schemes 27\u003c\/p\u003e \u003cp\u003eSales with Right of Return 29\u003c\/p\u003e \u003cp\u003eImproper Pushing of Current Revenue to Future Periods 30\u003c\/p\u003e \u003cp\u003eUse of Reserves as a Rainy Day Fund 32\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 Fictitious and Inflated Revenue 33\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eFictitious Revenue Schemes 33\u003c\/p\u003e \u003cp\u003eSales to Related Parties 37\u003c\/p\u003e \u003cp\u003eInfl ated Revenue Schemes 41\u003c\/p\u003e \u003cp\u003eConsignment or Financing Arrangements 43\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4 Misclassification Schemes 47\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eRecording Financing Arrangements as Revenue 47\u003c\/p\u003e \u003cp\u003eOne-Time Credits Reported as Revenue 49\u003c\/p\u003e \u003cp\u003eSales Incentive Schemes 50\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 Gross-Up Schemes 57\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAgent versus Principal 58\u003c\/p\u003e \u003cp\u003eBarter and Round-Trip Transactions 59\u003c\/p\u003e \u003cp\u003ePhony Revenue and Expenses 61\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART II ASSET-BASED SCHEMES 63\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6 Improper Capitalization of Costs 65\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eStart-Up Costs 66\u003c\/p\u003e \u003cp\u003eResearch and Development Costs 67\u003c\/p\u003e \u003cp\u003eProperty and Equipment 68\u003c\/p\u003e \u003cp\u003eSoftware Development and Acquisition Costs 71\u003c\/p\u003e \u003cp\u003eWebsite Costs 73\u003c\/p\u003e \u003cp\u003eIntangible Assets 75\u003c\/p\u003e \u003cp\u003eAdvertising Costs 77\u003c\/p\u003e \u003cp\u003eOther Deferrals and Prepaid Expenses 79\u003c\/p\u003e \u003cp\u003eInventory Capitalization Schemes 80\u003c\/p\u003e \u003cp\u003eInventory Flow Assumptions 81\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 Asset Valuation Schemes 85\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eFictitious Assets 85\u003c\/p\u003e \u003cp\u003eInventory Valuation Schemes 86\u003c\/p\u003e \u003cp\u003eInflating the Basis of Property and Equipment 88\u003c\/p\u003e \u003cp\u003eInflating the Basis of Assets Acquired in Noncash Transactions 89\u003c\/p\u003e \u003cp\u003eAssets Acquired from Related Parties 92\u003c\/p\u003e \u003cp\u003eUnderstating Depreciation and Amortization Expense 93\u003c\/p\u003e \u003cp\u003eInvestment Property 95\u003c\/p\u003e \u003cp\u003eImproper Valuation of Investments—Financial Assets 96\u003c\/p\u003e \u003cp\u003eLoans 104\u003c\/p\u003e \u003cp\u003eEquity Method Investments 108\u003c\/p\u003e \u003cp\u003eProportionate Consolidation 109\u003c\/p\u003e \u003cp\u003eImproper Classification or Amortization of Intangible Assets 111\u003c\/p\u003e \u003cp\u003eImpairment Losses—Nonfinancial Assets 112\u003c\/p\u003e \u003cp\u003eInvestments in Insurance Contracts 115\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 Fair Value Accounting 117\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eFair Value Considerations 117\u003c\/p\u003e \u003cp\u003eMethods of Measuring Fair Value 118\u003c\/p\u003e \u003cp\u003eInternal versus Externally Developed Valuations 124\u003c\/p\u003e \u003cp\u003eInputs Used in Measuring Fair Value 127\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART III EXPENSE AND LIABILITY SCHEMES 129\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9 Shifting Expenses to Future Periods 131\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eTiming Schemes Involving Liabilities 131\u003c\/p\u003e \u003cp\u003eAccounts Payable 131\u003c\/p\u003e \u003cp\u003eCompensated Absences 132\u003c\/p\u003e \u003cp\u003eContingent Liabilities 133\u003c\/p\u003e \u003cp\u003eAccrued Compensation 137\u003c\/p\u003e \u003cp\u003eImproper Use of Liability “Reserves” 138\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10 Omissions and Underreporting of Liabilities 141\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eDebt 141\u003c\/p\u003e \u003cp\u003eGuarantees 146\u003c\/p\u003e \u003cp\u003ePension Liabilities 149\u003c\/p\u003e \u003cp\u003eConditional Asset Retirement Obligations 152\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART IV OTHER FINANCIAL REPORTING SCHEMES 155\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11 Consolidations and Business Combinations 157\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eFraudulent Reporting Involving Consolidations 157\u003c\/p\u003e \u003cp\u003eBusiness Combinations 164\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12 Financial Reporting Fraud as a Concealment Tool 171\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eFinancial Statement Fraud to Conceal Asset Misappropriations 171\u003c\/p\u003e \u003cp\u003eFinancial Statement Fraud to Conceal Illegal Acts 174\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13 Financial Statement Fraud by Not-for-Profit Organizations 177\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eInflating the Value of Non-Cash Contributions 179\u003c\/p\u003e \u003cp\u003eImproperly Reporting Contributions Raised for Others 179\u003c\/p\u003e \u003cp\u003eNetting the Results of Fund-Raising Events 180\u003c\/p\u003e \u003cp\u003eImproper Allocation of Costs Associated with Joint Activities 182\u003c\/p\u003e \u003cp\u003eMisclassification of Expenses 185\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 14 Disclosure Fraud 187\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCategories of Disclosure Fraud 189\u003c\/p\u003e \u003cp\u003eCommon Disclosure Risks 189\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART V DETECTION AND INVESTIGATION 197\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 15 Detecting Financial Statement Fraud 199\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eMotives for Financial Statement Fraud 200\u003c\/p\u003e \u003cp\u003eFraud Risk Indicators 202\u003c\/p\u003e \u003cp\u003eInternal Control Indicators 202\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 16 Financial Statement Analysis 209\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eUse of Analytical Techniques to Detect Fraud 209\u003c\/p\u003e \u003cp\u003eHorizontal Analysis 210\u003c\/p\u003e \u003cp\u003eVertical Analysis 211\u003c\/p\u003e \u003cp\u003eBudget Variance Analysis 212\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 17 Ratio Analysis 215\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eResearch on Ratio Analysis 216\u003c\/p\u003e \u003cp\u003eUse of Operating Ratio Analysis to Detect Financial Statement Fraud 217\u003c\/p\u003e \u003cp\u003eAnother Useful Measure: Working Capital to Total Assets 225\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 18 Other Detection Procedures 227\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAnalysis Utilizing Multiple Ratios 227\u003c\/p\u003e \u003cp\u003eRatios Involving Nonfinancial Data 231\u003c\/p\u003e \u003cp\u003eOther Information and Disclosures in Financial Statements 232\u003c\/p\u003e \u003cp\u003eUnderstandability of Financial Statement Disclosures 234\u003c\/p\u003e \u003cp\u003eTesting of Journal Entries 235\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 19 Fraud or Honest Mistake? 239\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eThe “Smoking Gun” 240\u003c\/p\u003e \u003cp\u003eWitnesses 240\u003c\/p\u003e \u003cp\u003eAltered Documents 241\u003c\/p\u003e \u003cp\u003eMultiple Records 242\u003c\/p\u003e \u003cp\u003eDestruction of Evidence 242\u003c\/p\u003e \u003cp\u003eActions That Contradict Recommendations 243\u003c\/p\u003e \u003cp\u003ePatterns of Behavior 244\u003c\/p\u003e \u003cp\u003ePersonal Gain 244\u003c\/p\u003e \u003cp\u003eThere’s No Other Explanation for It 244\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 20 Assessing (or Minimizing) Auditor Liability 245\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eLitigation against Auditors 246\u003c\/p\u003e \u003cp\u003eConcealment from the Auditors 247\u003c\/p\u003e \u003cp\u003eAuditing Standards 248\u003c\/p\u003e \u003cp\u003eConsideration of the Risks of Material Misstatement 249\u003c\/p\u003e \u003cp\u003eImproper or Inadequate Use of Analytical Procedures 254\u003c\/p\u003e \u003cp\u003eAuditing Accounting Estimates and Fair Values 257\u003c\/p\u003e \u003cp\u003eRevenue Recognition Risks 263\u003c\/p\u003e \u003cp\u003eInsufficient Consideration of Related Party Transactions 266\u003c\/p\u003e \u003cp\u003eAuditing Disclosures in the Financial Statements 266\u003c\/p\u003e \u003cp\u003eOverreliance on the Management Representation Letter 267\u003c\/p\u003e \u003cp\u003eAppendix: Financial Statement Fraud Indicators 269\u003c\/p\u003e \u003cp\u003eBibliography 275\u003c\/p\u003e \u003cp\u003eAbout the Author 277\u003c\/p\u003e \u003cp\u003eAbout the Website 279\u003c\/p\u003e \u003cp\u003eIndex 281\u003c\/p\u003e \u003cp\u003eIndex to Cases 287\u003c\/p\u003e   \u003cp\u003e\u003cb\u003eGERARD M. ZACK, CFE, CPA, CIA,\u003c\/b\u003e is a fraud examiner and forensic accountant with more than thirty years of experience performing audits and investigating fraud. In addition to providing antifraud services to clients, he serves on the faculty of the Association of Certified Fraud Examiners, where he conducts antifraud training on financial statement fraud and other topics. He has also spoken at AICPA and IIA events.     \u003c\/p\u003e\u003cp\u003e\u003cb\u003eFINANCIAL STATEMENT FRAUD\u003c\/b\u003e \u003c\/p\u003e\u003cp\u003e\u003cb\u003eStrategies for Detection and Investigation\u003c\/b\u003e  \u003c\/p\u003e\u003cp\u003eAlthough financial statement fraud is the least frequently encountered fraud, it is by far the most costly, at a median loss of $1 million per case. Yet, the indirect losses from financial statement fraud—jobs, support, morale, and loyalty—are also significant and almost impossible to measure. Learn how to spot the warning signs before the damage is done. \u003ci\u003eFinancial Statement Fraud\u003c\/i\u003e explores the many different methods of perpetrating financial statement fraud, the accounting principles that are exploited, and the methods to detect and prevent fraud in any organization.  \u003c\/p\u003e\u003cp\u003eAssuming an understanding of basic financial statements and the purpose each serves, as well as basic accounting concepts, author Gerard Zack highlights the many different types of fraud schemes. \u003ci\u003eFinancial Statement Fraud\u003c\/i\u003e provides auditors, fraud investigators, government agencies, and investment analysts with detailed descriptions of the most common or emerging schemes involving the preparation and issuance of fraudulent financial statements.  \u003c\/p\u003e\u003cp\u003eFilling the need for practical guidance on financial statement fraud and the roles and responsibilities within companies, \u003ci\u003eFinancial Statement Fraud\u003c\/i\u003e features:  \u003c\/p\u003e\u003cul\u003e \u003cli\u003eReferences to pertinent U.S. and international accounting standards violated in the preparation of fraudulent financial statements\u003c\/li\u003e \u003cli\u003eA wide range of detection tools, from the simplest of ratios to complex analyses and tests, as well as fraud indicators\u003c\/li\u003e \u003cli\u003eA comprehensive, global approach that includes U.S. GAAP and IFRS\u003c\/li\u003e \u003cli\u003eRed flags and ratios to help you detect financial statement fraud schemes\u003c\/li\u003e \u003cli\u003eCoverage of auditor liability: when is an auditor liable for failing to detect fraud?\u003c\/li\u003e \u003cli\u003eReal-world cases that illustrate many of the fraud schemes featured throughout the book\u003c\/li\u003e \u003c\/ul\u003e \t \u003cp\u003eA companion website includes copies of SEC Accounting and Auditing Enforcement Releases (AAERs), complaints that were filed, and various other documents associated with most of the cases cited in the book. These documents provide all of the details associated with each case, enabling researchers to perform their own analysis to more fully understand the schemes and relate them to the detection tips provided in the book.  \u003c\/p\u003e\u003cp\u003eFinancial statement fraud can cost an organization more than just revenue. Arm yourself with the knowledge to identify where it happens, when to expect it, and how to detect it with the expert guidance found in \u003ci\u003eFinancial Statement Fraud\u003c\/i\u003e.\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47989212414181,"sku":"NP9781118301555","price":85.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781118301555.jpg?v=1761783228","url":"https:\/\/k12savings.com\/products\/financial-statement-fraud-isbn-9781118301555","provider":"K12savings","version":"1.0","type":"link"}