Fraudulent Financial Reporting, Conditions for Commuting Fraud, and Auditor's Management

4-2
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4-2
* Fraud involves intentionally misrepresenting facts in an accounts book and eventually the final financial statements in a company. Fraudulent financial reporting consists of an individual intentionally omitting or misstating the amounts in an attempt to deceive other people. For instance, earnings management is where the management deliberately acts to meet their earnings in the future. Also, there is income smoothing where expenses and revenues are shifted aimed at reducing earning fluctuations. On the other hand, misappropriation of assets involves stealing an entity’s assets which include stealing assets and the act of corruption by management.
* The three fundamental conditions necessary for commuting fraud are incentives, an opportunity, and...