Perceptions on Events Potentially Leading to Misstatements on Financial Reporting
Keywords:
Fraud, misstatement, Manipulation, Financial statementAbstract
Misstatements on financial reporting have costly affected to financial statement users including investors, creditors and employees among others. Previous research has pointed out that it is somewhat difficult to specify whether misstatements are a form management’s intention or not. If the misstatements are from management’s intention, it is considered as a fraud. The purpose of this paper is to investigate the capability of middle management in identifying the given situations that could turn up as misstatements on financial reporting. Questionnaire survey is employed as
a research methodology. Based on 163 subjects, the capability of respondents in correctly identifying the given grey-area situations that could lead to misstatements is quite limited ranging from 46% - 76%. They are not able to identify the situations about related party transactions leading to the misstatements. Moreover, respondents whose educational backgrounds are in engineering or arts/social science are less likely to identify the misstatements.
Published
Issue
Section
License
Copyright (c) 2024 Academic Research Publishers
This work is licensed under a Creative Commons Attribution 4.0 International License.
