Nowadays, accounting fraud is quite prevalent. It’s therefore important that financial executives should at least understand both the financial impact and the ways accounting fraud can be committed.

Let’s start with:
The financial impact of fraud:

• Fraud losses will reduce net income $ for $ of a company:For example, if a company’s profit margin is 10%, so revenues must increase by 10x. Imagine that if losses due to fraud, say is $1 million hence the company needs to generate revenue of $1 Billion to recover same,
• From studies, financial statement fraud often cause a dramatic decrease in market value of stock which might approximates 500 to 1,000 times the amount of the fraud,