Does exist areas in which mangement can manipulate, misistate or comit fraude ? Or is it only a legend ? Of course, with it’s important power, management can without any problem manipulate all the part of a financial statement. But the game is worth it the blow? One famous example : change the balance sheet with an increase of the stock holder's equity. The interest ? Lie on the reality of it’s company, and so persuade banks, states, and others companies of a very different health of what the situation is really. Forge its account, cross severals things in reserve... : it is regrettably the favorite game of certain companies ! To pay less taxes is something that companies want. How do what ? Try to have less charges : like this there will be less profit and by consequence less taxes. It’s clear that fiscally area is very interesting. To control this, we decided to create auditing firms. The goal of auditing firms if to frame the finance activity of the entreprise. They are here to check if the financial statements made by a society is the reality.

To finish, we’ll speak about a famous example, which shows the limit of the auditing firms. The former fifth (just after the big four) and famous firm Artur Andersen, with the society Enron.

In fact, Enron, with the help of a bank and its subsidiaries offshores (Caimans…) desguised some loans as sells. By doing this, Enron borrowed money without make it appear as debts ! Artur Andersen contributed to this fraude by the audit of Enron. They using the market value in accounting rather than the historical value.

We can say that firms have the opportunity to fraud as they want. But it will become more and more complicated. The power of action becomes less and less important to fraud, and it’s the role of auditing firms to check the account, with a staunch