Sunday, July 9th, 2006

How Fraud Occurs- Overstating Assets (Part 5)

Overstating Asset Fraud
An example: WorldCom

  • Overstatement of current assets (e.g. marketable securities)
  • Overstating pension assets
  • Capitalizing as assets amounts that should be expensed
  • Failing to record depreciation/amortization expense
  • Overstating assets through mergers and acquisitions
  • Overstating inventory and receivables (covered earlier)

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