ACCT 3403 Creative Accounting and Financial Statement Fraud
Even though Generally Accepted Accounting Principles (GAAP) appear strict in nature, the accounting profession recognizes a need for flexibility in different businesses and industries and an extensive use of estimates. This flexibility also provides opportunities for financial statement manipulation that may not reflect the true economic results and position of the business presented. Knowledgeable executives and managers can engage in "earnings management" and other deceptive or misleading techniques and procedures that are not "illegal."