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AC 460 Fraud Examination: Fraud 101

Selected Organizations and Code of Ethics in accounting

Domestic and International agencies

Alabama Securities Commission Enforcement Division 
The Enforcement Division coordinates its actions with the ASC Legal Division and local, state and federal authorities to thoroughly examine complaints, analyze financial transactions and help bring legal action against any person or entity that violates Alabama Securities Act. 

Transparency International
The global coalition against corruption.  

Crime Statistics, Investigations, and Law Enforcement

Other types of organizations, such as the Association of Certified Fraud Examiners, identify and analyze fraud cases. Their  2020 Report to the Nations on Occupational Fraud & Abuse (and earlier editions) analyzes occupational fraud cases  in 114 nations and addresses prevention and detection

Transparency International works with governments, businesses and citizens to stop the abuse of power, bribery and secret deals. 

State and federal government agencies such as the Federal Bureau of Investigation and the United States Department of the Treasury gather and report crime statistics. Here are examples of such reports.

Examples of Accounting Fraud

  • Merging short and long term debt into one amount to improve the perceived liquidity of the company
  • Failing to disclose risky investments or “creative” accounting practices
  • Over-recording sales revenue
  • Under-recording expenses (i.e. depreciation expense)
  • Misappropriation of funds

Sample List of Fraud Cases

SEC.gov Financial Reporting and Audit (FRAud) Group 
Provides links to Examples of Filed Actions

Selected Fraud Cases

Case: The SEC alleges that Martin Shkreli misappropriated money from two hedge funds he founded and made material misrepresentations to investors among other widespread misconduct.  The SEC also charged Retrophin’s former outside counsel and corporate secretary Evan Greebel with aiding and abetting certain aspects of Shkreli’s alleged fraud.

Case: AIG - Accounting of structured financial deals.  Securities Fraud.

Case:  Chiquita Brands International  - Illegal payments

Case: Peregrine Systems - Overstated sales

Case: Mortgage Fraud Scheme

Additional Cases from the SEC Enforcement Actions