three M’s of financial reporting fraud

three M’s of financial reporting fraud

5 paragraph essay

Using the format on this link

Topic is 3 M’s of financial reporting fraud
Double spaced and should come out to be about 2 pages

No references required, but don’t just plagiarize.

The 3 M’s of Financial Reporting Fraud

Fraud can be defined as an act carried out with the purpose of misrepresenting or deceiving. Hence, Fraudulent Financial Reporting refers to a legal concept that encompasses reckless conduct or intentional acts of commission or omission that results in misstated financial statements. A case in point would be the Enron Scandal that was exposed in October 2001; where the management concealed debts amounting to more than USD $1 billion and boosted revenues artificially among other felonies. Since financial reporting fraud can be detected, predicted and uncovered, this paper endeavors to unveil one of the most popular fraud models used by forensic auditors to uncover Financial Reporting Fraud.  Manipulation, Misrepresentation and Misapplication constitute the 3 M’s of Financial Reporting Fraud Model.


Manipulation: This entails the alteration or falsification of records of accounts or any other supporting documents. Misrepresentation: This constitutes the deliberate omission of data or information financial statements. Misapplication: This refers to the intentional misapplication of principles of accounting. These practices are rampant because of two major factors, it is unlikely to be detected by investors and in most cases the company’s financial performance is linked with the corporate executives’ compensation. In general, accounting provisions give significant leeway and flexibility which allows a company’s management to misrepresent the company’s financial status.

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