engleski

Indicators of Accounting Manipulations

The paper discusses the reasons for manipulating information in financial statements of companies, as well as the indicators that serve as warning signs of the possibility of fraud and to witch increased attention should be paid during the audit of financial statements. The manipulation of financial reports is especially present in times of significant growth in the general economy and within the companies that cannot keep track of the growth of their regular business, and in times of recession and crisis with the aim of “ cleaning” the financial statements, the balance-sheet positions burdened in times of growth. The objective is to capture a favourable position in face of a wave of increased economic activity. Manipulations of financial statements are especially present in companies where financial receipts and bonuses to management directly depend upon the results of operations. Manipulation in greater numbers is reported with the liberalization of accounting principles and policies, and with the introduction of the accounting principle of fair value. It should be noted that the occurrence of these indicators does not necessarily prove fraud, but they provide adequate signs of warning for fraudulent behaviour.

Accounting; Manipulations; Financial Statements

nije evidentirano