Quick Finance Tip - The Fraud Triangle and Rationalization of Accounting Games

The following are lookouts to keep an eye for:

• Failure of communication, implementation, support, or enforcements of ethical standards
• Nonfinancial management participation with selection of accounting principles
• Known history of violations
• Excess interest in stock price
• Excess interest by management of committing unattainable forecasts
• Management failing to correct reportable conditions
• Continuing attempts by management to justify inappropriate accounting
• Strained relationship between management and auditors