Includes index.

Financial Statement Fraud Defined -- Definition of Financial Statement Fraud -- Nature of Financial Statement Fraud -- Cost of Financial Statement Fraud -- Fraud Studies -- Sanctions for Perpetrations of Financial Statement Fraud -- Occurrence, Prevention, and Detection -- Financial Reporting of Public Companies -- Financial Reporting System -- Annual Financial Reporting Requirements -- High-Quality Financial Reports -- High-Quality Financial Reporting -- Six-Legged Stool of the Financial Reporting Process -- Corporate Financial Reports -- Contract View of Corporations -- Expectation Gap between Preparers and Users of Financial Reports -- Perceived Problems of Current Financial Reporting -- Cooking the Books Equals Fraud -- Financial Statement Fraud -- Profile of Financial Statement Fraud -- Financial Statement Fraud Case Analysis -- Fraud Prevention and Detection Strategies -- Realization, Prevention, and Detection -- Realization -- The 3Cs Model -- Economic Factors -- External Antecedent Factors -- Internal Antecedent Factors -- Top Management Team Characteristics -- Financial Statement Fraud Prevention -- Financial Statement Fraud Detection -- Correction Procedures -- Prevention, Detection, and Correction Strategies -- Taxonomy and Schemes -- Financial Shenanigans -- Taxonomy of Financial Statement Fraud -- Common Fraud Schemes -- Earnings Management -- Common Revenue Fraud Schemes -- Authoritative Pronouncements on Earnings Management -- Earnings Management and Financial Statement Fraud -- Symptoms of Financial Statement Fraud -- Whistle-Blowing -- Generic Characteristics of Companies Engaged in Fraud -- Role of Corporate Governance -- Definition of Corporate Governance -- Responsibility of Corporate Governance -- Corporate Governance Principles -- Role of Corporate Governance in Preventing and Detecting Financial Statement Fraud -- Characteristics of Corporate Governance -- Corporate Governance Structure -- Board of Directors' Oversight Responsibility -- The Role of the Board of Directors -- Composition of the Board of Directors -- Functions of the Board of Directors -- Responsibilities -- Attributes -- Characteristics in Companies Engaged in Fraud -- Audit Committees and Corporate Governance -- Evolution of Audit Committees -- SEC Rules on Audit Committees -- Audit Committees and Organized Stock Exchanges -- Blue Ribbon Committee Recommendations -- Blue Ribbon Committee Guiding Principles -- Future of Audit Committees -- Audit Committee Charters -- Charters' Benchmarks -- Chairperson of Audit Committees -- Audit Committee Report -- Audit Committees' Rules for Preventing and Detecting Financial Statement Fraud -- Management Responsibility -- Management Financial Reporting Responsibilities -- Management's Role in Financial Statement Fraud Prevention and Protection -- Management Motives and Incentives -- Gamesmanship -- Management Stock Ownership -- Management Power -- Internal Control Function -- Management Attitude Toward Financial Statement Fraud -- Role of the Internal Auditor -- Internal Auditors and Corporate Governance -- Internal Auditors' Responsibilities -- Internal Audit Fraud Standards -- The Efficacy of Internal Audit in Financial Statement Fraud Prevention and Detection -- Cooperation Between External and Internal Audit -- Internal Audits and the Audit Committee -- Internal Control -- Role of External Auditors -- Independent Audit and Financial Statements -- Independent Auditor and Financial Statement Fraud -- High-Quality Audits -- Independent Audit and Internal Control -- Fraud Detection Audit Procedures -- Audit Failures -- Improving Audit Effectiveness -- Current Developments in Public Accounting -- Materiality Guidance -- Risk Factors of Financial Statement Fraud -- Communication of Fraud -- Auditor Independence -- New SEC Rules on Auditor Independence -- Governing Bodies -- Securities and Exchange Commission -- SEC and Financial Statement Fraud -- Role of the American Institute of Certified Public Accountants -- Role of the Financial Accounting Standards Board -- SEC and FASB Relationship -- Fraud in a Digital Environment -- Digital Economy -- Electronic Commerce -- Changes in Business Environment -- Electronic Financial Reporting -- Fraud Examination Practice and Education -- Forensic Accounting Practices -- Certified Fraud Examiner -- Fraud Examination Education.

Financial statement fraud is a major problem for U.S. companies. For a variety of reasons, people in positions of power within organizations sometimes intentionally mislead investors and creditors with deliberately inaccurate financial statements. This book concentrates on common methods of financial statement fraud and ways corporate leaders can detect and prevent it. The author assesses the consequences of financial statement fraud and its impact on the integrity of companies guilty of such fraud; offers a variety of well-founded reasons corporate leaders should try in earnest to prevent it; and provides techniques leaders can use to detect and correct it. Using case studies of high-profile instances of financial statement fraud committed by well-known companies such as Waste Management, Inc. and Sunbeam, the author helps corporate leaders understand both the conditions that lead to this type of fraud and the ways it can be prevented.

Financial Statement Fraud provides guidelines and tactics boards of directors and audit committees can use to develop a corporate culture that discourages financial statement fraud, as well as unusual business practices, aggressive accounting methods, and violations of a company's applicable laws and regulations. Written specifically with publicly held companies in mind -- and packed with guidance from standard-setting organizations such as the AICPA and the SEC -- the book provides theoretical and practical advice ideally suited for management and auditors who understand the importance of recognizing and stopping financial statement fraud.