Intentional Manipulation of an Organization’s Financial Statements (Case Study Sample)

Student’s Name
Instructors Name
Course Code/Name
Date
Accounting Fraud
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