2. Financial Statements Fraud Pertemuan XXIII Matakuliah: F0184/Audit atas Kecurangan Tahun: 2007

3. Bina Nusantara Mahasiswa diharapkan dapat melakukan analisa terjadinya sebuah kecurangan dalam pelaporan keuangan Mahasiswa diharapkan mengetahui ancaman yang dapat terjadi dalam aktivitas pelaporan keuangan Learning Outcomes 3

4. Bina Nusantara Fraud Definition Red Flag of Financial Statements Methodologies of financial statements fraud –Earning Manipulation –Earning Management –Balance Sheet Manipulation Outline Materi 4

5. Elimination of Materiality Loophole Materiality will not valid in the following conditions: ₣Whether the misstatement arises from an item capable of precise measurement or whether it arises from an estimate ₣Whether the misstatement masks a change in earnings or other trends ₣Whether the misstatement hides a failure to meet analysts consensus expectations for the enterprise ₣Whether the misstatement changes a loss into income or vice versa Bina Nusantara

6. Elimination of Materiality Loophole (Con’t) Materiality will not valid in the following conditions: ₣Whether the misstatement concerns a segment or other portion of the registrant’s business that has been identified as playing a significant role in the registrant’s operations or profitability ₣Whether the misstatement affects the registrant’s compliance with regulatory requirements ₣Whether the misstatement affects the registrant’s compliance with loan covenants or other contractual requirements Bina Nusantara

7. Elimination of Materiality Loophole (Con’t) Materiality will not valid in the following conditions: ₣Whether the misstatement has the effect of increasing management’s compensation ₣Whether the misstatement involves concealment of an unlawful transaction Bina Nusantara

8. Common Methods of Committing Fraud Earning Manipulation Earning Management Balance Sheet Manipulation Bina Nusantara

9. Earning Manipulation Insider Trading Stock Compensation Contingent Compensation Bina Nusantara

10. Earnings Management Big bath restructuring chargesIn process research and developmentCookie Jar reserves Materiality Bina Nusantara

11. Balance Sheet manipulation Fraudulent Entries Hiding Transactions Bina Nusantara