Fraud guidance for corporate counsel reviewing financial statements and reports

Rodney L. Crawford, Thomas R. Weirich

Research output: Contribution to journalReview articlepeer-review

11 Scopus citations

Abstract

Purpose With the passage of the Sarbanes-Oxley Act of 2002, corporate legal counsel has an increasing responsibility related to fraud. The purpose of this paper is to focus on financial reporting fraud resulting in the false presentation of operating results and financial position to the public, lenders, taxing authorities or other corporate stakeholders. Design/methodology/approach The paper reviews cases with a focus on financial reporting fraud as identified by corporate counsel. Findings The ways in which corporations can utilise corporate counsel to protect themselves from financial statement and other reporting frauds. Practical implications This paper provides guidance to corporate counsel as to some of the common forms of financial statement fraud and the risk factors (red flags) that may indicate the presence of fraud. Originality/value Corporate counsel, by virtue of their natural involvement in the negotiation of contracts and customer/vendor disputes, as well as their consulting role to top management in many types of business transactions and problems, are uniquely positioned to identify financial statement fraud issues and other financial disclosure problems.

Original languageEnglish
Pages (from-to)347-360
Number of pages14
JournalJournal of Financial Crime
Volume18
Issue number4
DOIs
StatePublished - 2011

Keywords

  • Financial statement fraud
  • Fraud
  • Legal counsel
  • Sarbanes-Oxley
  • United States of America

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