The Financial Accounting Information, Research Paper Example

The financial accounting information are not assembled or reported objectively in inventories. The data here are full of biasness and inconsistency as every ‘fraudsters’ hides his filthy works ($250 is million written off but $260 won’t be disclosed). All other data presented are as well non-true. There is so much hidden and little presented and so numerous accounting principles are violated by the two parties. Exchange Commission and Securities can help reveal the filthy works of these ‘fraudsters’. The financial statements are affected (Oconto, 2006).

Numerous regularity principles are violated in this content. First, the accounting principle violated is consistency. All similar items that follow in exactly similar way are not entered. Principle of sincerity is also violated. The reality, consistency, of the financial status is not represented and so the duty of securities and exchange commissions to correct the wrong information. They should indicate to the reader the correct information and the reality of the two situations. The other principles like; permanence of methods, prudence, and continuity are as well violated. The conditions as they appear are not presented but hidden. This can lead to misinterpretations from the readers and in financial statements (Krantz, 2001).

Inventory frauds are the inventory items misappropriation by a worker from his/her employer. The theft is hidden as the employee attacks the business system in dissimilar method. The fraud can be committed by any person who can control or access the purchase of inventory. It is an open fraud.  The officer in charge of the purchase do find it hard to make adjustments to inventory records, and salesman can access the records of sales, and so the two will commit fraud in various ways. Any information like; quantity purchased, amount/price per item can be altered and hence the fraud (Oconto, 2006).

Reference

Krantz, M. (2001, July 16). Tech firms stand to gain from huge write-offs [Electronic version].USA Today.

Oconto, T. (2006). Frauds and ‘fraudsters’: Modern market situation: Reid publishers.