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Studies on Earnings Management and Financial Statement Fraud in Corporate Firms

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  • Noorul Azwin binti Md Nasir
  • Muhammad Jahangir Ali
  • Noorshella binti Che Nawi

Abstract

The purpose of this paper is to explain the transformation of earnings management into financial statement fraud. Related papers on earnings management and financial statement fraud were intensively reviewed. Although there are some overlaps in both concepts, application of earnings management is not always related to financial statement fraud. Earnings management can occur for a number of reasons, including unintentional errors and legitimate disagreement over GAAP. Results of this study indicate that accounting records are allowed to be managed up to certain hedge. Crossing the hedge would lead the organization to be convicted in illegal financial reporting.

Suggested Citation

  • Noorul Azwin binti Md Nasir & Muhammad Jahangir Ali & Noorshella binti Che Nawi, 2019. "Studies on Earnings Management and Financial Statement Fraud in Corporate Firms," Research in World Economy, Research in World Economy, Sciedu Press, vol. 10(2), pages 15-19, July.
    • Handle: RePEc:jfr:rwe111:v:10:y:2019:i:2:p:15-19
    DOI: 10.5430/rwe.v10n2p15
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    References listed on IDEAS

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