FINANCIAL REPORTS – AN INSTRUMENT OF PERPETRATION AND DETECTION OF FRAUDULENT ACTIONS
Keywords:
Financial statements, fraudulent activities, falsification of financial statements, forensic toolsAbstract
Purpose: Financial reports constitute one of the foremost deliverables of the accounting function within a business entity. They serve as an indispensable source of information, aiming to present an objective and transparent depiction of the company’s state. Nonetheless, they can be manipulated or misused with the aim of benefiting specific individuals in an unlawful manner. Specifically, financial reports can assume a dual role: they can be employed as instruments for perpetrating fraudulent actions, while simultaneously serving as highly efficacious means for their detection.
Design/Methods/Approach: In this paper, the focus will be on fraudulent activities in which financial statements appear as a means to conceal or commit fraudulent activities. In addition to the detection of fraudulent actions in financial statements, the subject of this work is also protection against such frauds and other illegal actions. The methodological framework of the work includes analysis, synthesis and description with the use of relevant literature by foreign and domestic authors.
Findings: One of the goals of the paper is to point out the importance of truthful and objective presentation of financial statements and the damage that results from the use of creative accounting. Also, one of the goals is to offer a wider range of information and knowledge about fraudulent actions in financial reports. Emphasis in the paper is on the importance of methods and analysis of financial reports in forensic accounting investigations of fraudulent actions in financial reports, all with the aim of better understanding of the activities and role of the accounting profession in suppressing fraudulent actions and manipulations.
Originality/Value: This study provides a solid foundation for future research, as the addressed topic remains relevant on both a local and global scale.
Keywords: financial reports, instrument, fraudulent actions, fraudulent action detection, forensic accounting investigation.
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