Manipulation in Financial Statement

Abstract

There are many underlying reasons for financial fraud. First, the rapid global economic, technological and financial development has made it difficult to address new problems with existing theories and experiences. Among these are the uncertainties in financial stability. Second, in the transition from planned to market economy, some aspects of institution building is still in a vague, non-planned and non-market, or conflicting stage. There are many loop holes in the accounting standards and practices. Third, this phenomenon of financial fraud is rising as the time is passing by. The major players in this game are the owners of the organizations, the CEO’s and mainly the top management. All this has started a new ethical dilemma. With growing fraud cases in the world new ethical issues are rising. Reality has proved that all kinds of problems in the economy are reflected in the workings of the financial system, which was particularly evident during the Asian financial crisis. Financial fraud, if not addressed in a timely manner, could continue to grow and develop into economic and financial crisis. We must put more emphasis on understanding the financial fraud and the uncertainties involved. Only by taking timely measures, could potential risks be removed. It is a world-wide experience that the longer the risks are left unattended, the harder it is to solve them.