Which term describes manipulating business records to achieve desired financial outcomes?

The correct answer is - Fraudulent financial reporting

Key Points

• Fraudulent financial reporting
  • Involves the intentional manipulation of financial records to present a desired outcome.
  • This can include overstating revenues, understating expenses, or misrepresenting financial data.
  • Typically done to deceive stakeholders and maintain a favorable company image.
  • Considered illegal and unethical, with severe penalties for those involved.

Additional Information

• Financial forecasting
  • Involves predicting future financial performance based on historical data and analysis.
  • Used for budgeting, planning, and strategy development.
  • Relies on statistical tools and economic models.
  • Does not involve intentional deception or manipulation of data.
• Corporate governance
  • Refers to the system of rules, practices, and processes by which a company is directed and controlled.
  • Ensures accountability, fairness, and transparency in a company's relationship with its stakeholders.
  • Includes policies on ethical behavior, risk management, and compliance with laws.
• Transparent auditing
  • Involves the objective examination and evaluation of a company’s financial statements.
  • Aims to provide an unbiased assessment of the financial health of an organization.
  • Ensures compliance with accounting standards and regulatory requirements.
  • Focuses on accuracy and honesty, without manipulation of records.