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Explaining fraud in audits

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Our team has a commitment to providing the finest accounting services. We have done so for more than three decades. Thanks to our longevity and focus on staying up to date on any changes in laws, we are knowledgeable on all elements of the profession. Over time, we have made ourselves into the leading company for auditing Soho has to give.

Something that can come up in an audit is evidence of fraud. This occurs when someone has illegally changed financial statements. They do this to hide losses or profits, or manipulate their financial health. It is a crime that can have severe punishments. After all, it sabotages the trust that exists in the global financial system.

How auditing works

Auditing SohoWith auditing, you are able to examine the financial records and statements of a business. This is to guarantee fair representation and accuracy. Transactions that you document within the records and in statements have to give a fair representation. They must fairly represent a business’ operations and economic state.

You internally create financial records. As a result, they are vulnerable to fraud or manipulation from insiders. There are all sorts of personal incentives to alter these records.

Auditing is crucial to guarantee that the statements and records are not misstated. Auditors need to acquire rational assurance that there is no material error in the financial statements. When they are happy, they will provide a proper opinion.

When does fraud occur?

Accounting fraud happens when an entity falsifies its financial statements deliberately. This could be a company or even the government.

Sometimes, it can be hard to define fraudulent behaviour in accounting. This is because you base various elements in the financials on estimates. To give an example, a company might opt to produce an estimate and then revise it later. It is not at attempt to commit fraud. This is as long as the business did it in good faith. They can do this by using the relevant details during the time of the estimation.

Accounting fraud can also happen when you make deliberate misstatements. For instance, a business could overstate the assets it has. They would do so to make it seem like they are more financially healthy.

One other example is where a business overstates its revenue. The intent here is to look more profitable.

Auditing in Soho that will work for you

At Brian G Lonis & Co, we aim to provide clients with solutions capable of meeting all their needs. A key part of the process is working with your business to understand how it operates. Once we have all the details, we will be able to help you enhance your business.

So, if you would like help from the best team offering auditing Soho has, get in touch with us today. You can rely on is if you have concerns or want a better picture of things.