Although financial statement fraud is the least common form of occupational theft (9% of incidents), it costs organizations the most in financial losses, according to the Association of Certified Fraud Examiners. Businesses defrauded by financial statement schemes had median losses of $593,000. Early revenue recognition, which distorts profits and can artificially boost a business’s financial profile, is popular among financial statement fraud perpetrators. To comply with Generally Accepted Accounting Principles and preserve your company’s reputation, you must prevent such activities on your watch. It’s also important to be able to detect them in the financial statements of business partners, including acquisition targets and customers applying for credit. Schemes and warning signs Owners, executives and others with access to financial statements might recognize revenue improperly by delivering products early,...