By manipulation or falsification of accounts we mean to say that the accounts are prepared in such a way as to show more profits or less profit or even to show a loss when in fact there is no loss. This type of fraud is difficult to discover. It is usually committed by directors or managers with certain objects.
More from this Section
- Time ticket
The time ticket is a document that indicates the employee, the hours worked, the account and job to be charged, and the total labor cost.
- Gross profit
Gross profit refers to the excess of net sales over the cost of goods sold. Companies deduct from sales revenue the cost of goods sold in order to determine gross profit.
- Direct labor variance or total labor variance
The direct labor variance or total labor variance is the difference between the actual hours times the actual rate and the standard hours times the standard rate for labor.
- Return on common stockholders' equity
A widely used profitability ratio is return on common stockholders’ equity. It measures profitability from the common stockholders viewpoint
- Participative budgeting
Participative budgeting is a budgetary approach that starts with input from lower-level managers and works upward so that managers at all levels participate.
- Consolidated financial statements
When a company owns more than 50% of the common stock of another company, it usually prepares consolidated financial statements. These statements present...
- Internal process perspective
Internal process perspective is a viewpoint employed in the balanced scorecard to evaluate the effectiveness and efficiency of a company’s value chain...