The object of the current study are the challenges that auditors face and the falsification of financial reports something that occurs quite often recently. The term “falsification of financial reports” refer to the intentional change of financial data aiming at the over-evaluation of asset, sales and profits or undervaluation of expenses and damages so as to achieve the desired result. Therefore, they manage to alter the image of financial reports.
By using a representative sample of 32 companies whose stocks are negotiated at the Stock Exchange, it is sought to comprehend the phenomenon of falsification and naturally, by using the right literature.
The aspects of falsifying financial statements as well as its consequences are many and can be economic, social, political, moral, but also legal.
The role of the auditor and its behavior are crucial since there is the necessity of having moral quality which will be based on the controlling services of high quality internal control which consists the final result of the study.
Table of Contents
Chapter 1 - Introduction
1.1 Purpose of the research
1.2 Importance of the research
1.3 Aims and objectives of the research
1.4 Limitations of the research
1.5 Background History
1.6 How is project arranged
Chapter 2 – Literature Review
2.1 Ethics
2.2 Ethics – definition
2.3 Ethics Separation
2.4 Corporate Moral Governance
2.5 Internal Audit – historical background
2.6 Deontology code
2.7 Falsification of financial statements - definition, motivation and consequences
2.8 Where the phenomenon of falsification appears
2.9 Methods of falsifying financial statements and direct effects
2.10 Who are independent auditors and which is their job.
2.11 Auditors’ responsibility – Internal and external control
2.12 Internal audits through the use of electronic information systems
2.13 Strong corporate culture
2.14 Rewards for right attitude and direct punishment for inappropriate behavior
2.15 System of information and communication
2.15.1 Information
2.15.2 Communication
2.15.3 Whistleblowing
2.16 Internal audit committee
2.16.1 Effective operation of the Audit Committee
Chapter 3 – Research Methodology
3.1 Research design and Data Collection
Chapter 4 - Data analysis
Chapter 5 – Conclusion
Research Objectives and Themes
This study investigates the challenges auditors face regarding the intentional falsification of financial reports, specifically within the context of Greek companies. It aims to analyze the role of auditors, the effectiveness of internal control systems, and the impact of transitioning to International Accounting Standards on transparency and corporate governance.
- The phenomenon of "accountancy fraud" and methods used to distort financial data.
- The crucial role of auditors and the necessity of high moral and ethical standards.
- Corporate governance mechanisms, including internal audit committees and whistleblowing policies.
- Comparative analysis of financial reporting quality under Greek Accounting Standards vs. International Accounting Standards across various industries.
Excerpt from the Book
2.9 Methods of falsifying financial statements and direct effects
As falsification techniques are considered techniques used by companies through their cooperation. This may be a virtual buying and selling in firms with the same activity or sales presentation advances to their accounts in the form of sales already made.
However, since more than one businesses are involved, there should be a very good cooperation between the two or more administrations.
Accounting fraud does not necessarily mean that starts with an illegal practice. As it was rightly mentioned by Dooley (2002) «When it comes to a fraud by falsifying financial statements, the human imagination is common to invent myriad combinations of accounting irregularities to deceive investors.»
Methods used are the over-invoicing of sales, use of spending calculus 1% or 2% of sales without documents in export or tourism businesses, deliberately delayed of issuing invoices (especially towards the end of the closing year) and the failure to issue invoices so as to value added tax not to be paid.
Summary of Chapters
Chapter 1 - Introduction: Defines the phenomenon of accountancy fraud and outlines the research purpose, which is to examine unethical auditor behavior in Greek companies.
Chapter 2 – Literature Review: Provides a theoretical framework covering ethics, corporate governance, the historical background of internal audits, and the definition and consequences of financial statement falsification.
Chapter 3 – Research Methodology: Explains the quantitative approach adopted, including the use of a Management Commentary Scoring Sheet to evaluate 32 companies.
Chapter 4 - Data analysis: Presents the findings of the empirical study, broken down by industry sector, comparing financial reporting data before and after the adoption of International Accounting Standards.
Chapter 5 – Conclusion: Summarizes the findings, highlighting that while internal controls are essential, they require a strong moral foundation and proper implementation to effectively prevent corporate fraud.
Keywords
auditor, behavior, falsification, accountancy fraud, International Accounting Standards, internal audit, corporate governance, ethics, financial reports, whistleblowing, moral quality, internal control, transparency, Greece, business risk.
Frequently Asked Questions
What is the primary focus of this research?
The research focuses on the issue of unethical auditor behavior and the falsification of financial reports, specifically analyzing how this phenomenon occurs and how it is managed within the context of Greek companies.
What are the central themes of the work?
The central themes include the role of independent auditors, the importance of strong corporate culture, the function of audit committees, the necessity of internal controls, and the ethical implications of financial reporting.
What is the main objective of this study?
The main objective is to present cases of unethical auditor behavior in Greek companies and to analyze the consequences of implementing International Accounting Standards compared to previous national standards.
Which scientific methodology is applied?
The study utilizes a quantitative research methodology, using a Management Commentary Scoring Sheet to analyze data from a representative sample of 32 companies listed on the Athens Stock Exchange.
What topics are covered in the main section?
The main section covers the definition and methods of financial statement falsification, the history of internal audits, the role of corporate governance, the importance of whistleblowing, and detailed sector-specific data analysis.
Which keywords characterize this work?
Key terms include auditor, behavior, falsification, accountancy fraud, International Accounting Standards, internal audit, corporate governance, and moral quality.
How did the change to International Accounting Standards affect the companies studied?
The study found varied reactions; some sectors like insurance and gaming showed positive adaptations, while others, particularly those with high competition like the food industry, appeared to provide less transparent data after the change.
Why is whistleblowing considered important in this context?
Whistleblowing is highlighted as a critical tool for enhancing corporate governance and preventing illegal acts, serving as a protective mechanism when internal moral cultures are insufficient.
- Citar trabajo
- Fotini Mastroianni (Autor), 2015, Unethical Behavior of Auditors, Múnich, GRIN Verlag, https://www.grin.com/document/358035
