Journal entries may signal financial statement fraud

With a median loss of $954,000, financial statement frauds are the costliest type of white-collar crime, according to the Association of Certified Fraud Examiners (ACFE). But by testing journal entries, auditors and forensic accountants can detect financial misstatement. Experts use technology tools to find red flags such as entries made to seldom-used accounts and by individuals who typically don’t make journal entries. Those made at the end of the period with little or no explanation or description, also raise suspicions. Contact us if you suspect your company’s financial statements have been manipulated.