Accounting Scandal

An accounting scandal is a business scandal arising from the deliberate manipulation of a company financial statements by trusted executives. Typical methods include overstating revenue and asset values, understating expenses and liabilities, and other complex schemes to misuse or misdirect funds, producing financial statements designed to mislead investors and shareholders, a practice sometimes described as creative accounting that can shade into outright fraud. Such schemes are usually uncovered through manual review or automated analysis and typically draw investigation from government regulators such as the United States Securities and Exchange Commission, and employees who falsify accounts at their employer direction can still face personal criminal prosecution.