Plug the drain – How to detect financial statement fraud
Abstract: Sarbanes-Oxley notwithstanding, the Association of Certified Fraud Examiners (ACFE) states that U.S. organizations continue to lose about 7% of their annual revenues to fraudsters. It also has found that financial statement fraud is the costliest form. This article looks at common financial statement schemes, and points out red flags in both the documents and in employee behavior that might indicate fraud. A sidebar points to several financial ratios and indicators that signal potential financial statement fraud.