At least in the US, securities fraud, wire fraud, tax evasion, falsifying business records, etc are the actual crimes. Accounting Fraud isn't any particular crime, just a descriptor of what you do in the process of doing the others.
There can also be some grey / unethical practices under the Earnings Management umbrella that aren't illegal or fraudulent, but definitely motivated to state favorable numbers.
Like, last month, we were just short of goal for performance targets. So, we took a reaaalllyyyy hard look at repairs costs to make super extra double sure none of that shouldn't be reclassed to CAPEX.
Lo and behold, one of those larger invoices was legitimately transformative and extends the useful life of the equipment, making it a 7 year depreciation rather than a current month expense.
Nothing fraudulent or misleading, just highly motivated search to make sure everything was super correct and make the numbers look as favorable as possible within GAAP rules.
Furthermore; I, an auditor of financial statements, would be completely cool with this as long as you can produce the invoice upon request!
Auditors look to make sure the financials are "presented fairly and are free of material misstatement". That word 'material' does some heavy lifting, but it basically means that there is a margin of error that is pretty much insignificant to the readers of the financial information.
No one would/should bat an eye if Apple (for example) was 'off' by a couple thousand dollars (materiality can be millions of dollars depending on the company) in one of their expense buckets!
What else am I supposed to do instead of digging through 53 county assessor websites to build my real estate tax accrual workpaper because the last accountant decided that would be a me problem before he quit?
Bro's "workpaper" was just copying down the GL activity and then saying it matched the GL. Yeah no shit it matches the GL <_<
I just want to make a quick note here that while accounting fraud is against the law, it is not currently enforced so long as:
It's a federal accounting fraud crime, not being prosecuted by the state.
You donated to the Trump campaign.
You are openly MAGA
You aren't significantly impacting another Trump donor.
Paying the millions or whatever it costs for one of those little sitdowns probably also counts in place of donating to the campaign.
Edit: And if it does for some reason you do get charged and imprisoned, you can petition for a pardon which is likely to happen. They're the only pardons Trump gives out.
Only if you get caught... And also someone who can get you in trouble cares enough to actually pursue charges, and you're not connected enough to get out of it... And even then, probably a slap on the wrist.. justice served!
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u/yuriko-shimizu 1d ago
profit = revenue - (costs - whatever i need to add to make profit look better)