WAYS OF COMMITING ACCOUNTING FRAUD THROUGH PRODUCT COSTING

Aug 20th, 2016
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WAYS OF COMMITING ACCOUNTING FRAUD THROUGH PRODUCT COSTING

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Running head: ACCOUNTING FRAUD1Name:Course code & title:Institution:Date:ACCOUNTING FRAUDWays of Committing Accounting Fraud Using Product CostingAccounting fraud refers to a deliberate interference of statements of finance in order tohide the actual financial well-being of a company. This could involve the organization itself, anemployee or an account and this gives misleading information to shareholders and investors(Bologna, 2011). Accounting fraud can be perpetrated through various means one of which isthrough product costing. Product costing can be used to perpetrate fraud in accounting in variousways some of which are discussed below.The first way is through inflation of overheads. Overheads can be inflated deliberately tohide embezzlement of resources and funds in a company or an organization. This could be aimedat inflating the goods sold in order to decrease operating profit margins and as a result, the taxpayable can also be lowered as well. By indicating an inflated overhead variance, employees andworkers of a company or an organization can obtain an opportunity to embezzle companyresources and funds (Erickson, 2006). Such actions are aimed at foo

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