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The Association of Certified Fraud Examiners (ACFE) fraud tree categorizes types of fraud schemes into three areas:

  • Corruption
  • Asset Misappropriation
  • Financial Statement (FS) Fraud

Previous courses have addressed corruption and asset misappropriation. This course focuses on the areas of financial statement fraud related to revenue. Revenue processes can be complicated and provide an inherent opportunity for inappropriate activity.

Financial Statement fraud is the deliberate misrepresentation of the financial condition of an enterprise. It is accomplished through intentional misstatement or omission of amounts or disclosures in the FS to deceive financial statement users.  According to the ACFE’s Report to the Nation, in 2016, financial statement fraud comprised 9.6% of cases with a median dollar loss of $975,000.  The typical duration of financial statement fraud prior to detection is 24 months.

There are numerous methods under which revenue should be recognized.  Accordingly, there are numerous ways perpetrators try to side-step the process and override the proper revenue recognition requirements.  Financial personnel must remain vigilant and understand the types of financial frauds that can be perpetrated in their company.

Learning Objectives

  • Explore the meaning of financial statement fraud.
  • Discover the concept of revenue recognition fraud.
  • Explore frauds and mitigating procedures related to fictitious customers.
  • Explore cases and mitigating factors for round-tripping, consignment sales and channel stuffing.
  • Discover revenue frauds created by special term agreements including up-front fees, side agreements and promotional allowances.
  • Explore mitigating procedures for special term agreements.
Last updated/reviewed: September 18, 2018

Included In Certifications

This course is included in the following Expert Certifications:

11 CoursesBusiness Fraud Identification and Prevention Certification

  1. Intro to Forensic Accounting and Investigation
  2. Dissecting the Fraud Triangle
  3. Fraud: Focus on Corruption
  4. Fraud: Focus on Fraudulent Disbursements
  5. Fraud: Focus on Cash Component of Asset Misappropriation
  6. Fraud: Focus on Inventory
  7. Fraud: Focus on Financial Statement Fraud – Part One
  8. Fraud: Focus on Financial Statement Fraud – Part Two
  9. Fraud and COSO 2013
  10. Top Fraud Schemes
  11. Fraud Risk Assessments

11 Reviews (54 ratings)Reviews

5
Member's Profile
She explains the slides, however, she seems to read more from the slides than she needs to. The biggest problem I found is that when she skips a word or phrase from the slides, she stutters and tries to go back to reading slides exactly as opposed to just saying what she means and then gives an example. But she did a good job.
5
Anonymous Author
I thought the instructor was very thorough and provided excellent examples of fraud involving revenue and also techniques on how to detect it.
5
Member's Profile
I really enjoyed the course, learned a lot about the different types of financial statement fraud and examples for each type.
5
Anonymous Author
This course is very practical to describe the process of determining fraud with financial statements.
5
Member's Profile
The course provided very valuable and helpful information in understanding financial statement fraud.
4
Member's Profile
Easy to understand, topics are well organized, audit procedures are very helpful.
4
Anonymous Author
Good course, I thought it provided a solid high level summary.
5
Member's Profile
Good overview of fraud as it relates to financial statements.
5
Member's Profile
Easy to understand and logical. Will take Part Two!
5
Anonymous Author
Includes unusual terms for those new to fraud audit
5
Anonymous Author
I like the review questions

Prerequisites

Course Complexity: Intermediate

No Advanced Preparation or Prerequisites are needed for this course. However, it is recommended to take the other courses in the series prior to completing this one.

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
INTRODUCTION AND OVERVIEW
  13:14Introduction to Focus on Financial Statement Fraud Part One
Focus on Financial Statement Fraud
  12:22Revenue Rec - FS Fraud
  10:29Revenue Recognition
  15:31Methods of False Revenue Recognition
  4:53Round Tripping
  5:40Consignment Sales
  6:41Procedures
  5:30Channel Stuffing
CONCLUSION
  7:08Other Rev Rec Considerations
CONTINUOUS PLAY
  1:21:30Focus on Financial Statement Fraud Part One
Supporting Materials
  PDFSlides: Focus on Financial Statement Fraud – Part one
  PDFFocus on Financial Statement Fraud – Part one Glossary/Index
REVIEW AND TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM