A
ll corporate frauds involve manipulation of
accounts. Financial statement frauds can be de-
ned as a category of corporate frauds where fraud
is committed by the controlling share holders and/
or management of a company with the intention of
presenting false nancial statements to dierent stake
holders. This paints a misleading picture of the com-
pany’s net worth, equity base and performance. The
main objectives in cases of such manipulation of ac-
counts are as follows:
To induce banks and nancial institutions to pro-
vide credit facilities beyond the actual borrowing
capacity of the company
To lure other investors by presenting an inated
view of net worth, turnover and protability.
Financial Statement Frauds
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