Intentional Manipulation of an Organization’s Financial Statements (Case Study Sample)
A CASE STUDY, explaining the impact of fraudulent activities of an accountant.
Intentional manipulation of an organization’s financial statements to generate false financial health is considered accounting fraud. This form of fraud can happen when an accountant, employee, or an organization itself manipulates its financial statements. Financial statements can be manipulated by failing to record expenses, misstating liabilities and assets, or even overstating revenues (Rezaee 279). In this case, Harmony intentionally overstated the sales revenues. Even though overstating sales revenues is usually not considered a major crime, it is unethical and can lead to the fall of a business or damage to its image. Hence, Harmony did the wrong thing, and this can lead to many problems.
On a personal level, Harmony can lose her job if the bank or external financial auditors discover her actions. She also risks being jailed for engaging in fraudulent activities. For the bank, these actions can drive up the share price, creating a false image of the bank’s financial health if the two bank’s branches continue to miss the targeted sales. As a result of the increased share price, investors might demand higher earnings per share or profit interests, which the bank might fail to offer. In this situation, the bank risks being accused of fraud. The investors might sue the bank, and the bank could also lose potential investors in the future. At the same time, the bank might be taxed more based on its false financial statements. This could lead to the downfall of the bank or even legal action against it if it fails to meet the increased tax demands. If the bank survives, it will end up with a bad image in the long run.
Therefore, Harmony should ensure that she presents
- Case Study: Financial PromptsDescription: Harmony is entangled in an ethical dilemma between saving her subordinates' tenure and upholding the company's policy and values. She chose the former an action which reveals that she is kindhearted. ...2 pages/≈550 words| 2 Sources | APA | Accounting, Finance, SPSS | Case Study |
- WACC, Payout Ratio, and Future Prospects for BHP GroupDescription: The Weighted Average Cost of Capital (WACC) refers to the average expected rate that a firm is expected to pay its security holders for financing its assets. As the firm's average cost of capital, it uses weights to measure the burden of a firm's sources of funds both from Debt and equity proportionately. W...6 pages/≈1650 words| 5 Sources | APA | Accounting, Finance, SPSS | Case Study |
- Amazon Case Study: Historical Financial AnalysisDescription: The horizontal analysis of the statement of cash flows indicates that Amazon's cash and cash equivalents have been increasing for the period under consideration. The increase is attributable to the rise in net income, which increased by 15.04% from 2018 to 2019 and rose by 84.08% in 2020. Thus, the net cash...3 pages/≈825 words| 2 Sources | APA | Accounting, Finance, SPSS | Case Study |