Dig deeper to avoid fraudulent financial restatements

Description

Abstract: To ensure that corrections aren’t covering up fraudulent activity, it’s important for community bank lenders to take a second look when their borrowers present them with financial restatements. While a careless mistake isn’t necessarily unethical, this article uses a hypothetical example to illustrate how bad accounting can easily slide into fraud — whether intentional or unintentional. It suggests that lenders need to carefully evaluate borrowers’ financial restatements so that their banks can head off potential bad loans before they happen.