**2.2 Handling of financial statements**

The manipulation of financial statements most often relates to an excessive or excessively exaggerated recognition of revenue, and an undervaluation of operating expenses or an overvaluation of assets [4]. The extent of accounting and financial manipulation by companies is difficult to pin down due to the multitude of events, prosecutions, and counter-prosecutions that have characterized this file. However, according to the information available, it generally seems difficult to verify accounting or financial information such as the increase in profits. Indeed, a swelling generally reflects the nonrecognition of certain operations or even an overvaluation of negotiable securities, tax credits receivable.

#### **2.3 Misleading disclosure absent**

When the disclosure of financial and accounting information, which should be made by the officers of the companies, is absent or misleading, the companies may be liable to fines of up to millions. What is certain, acts of fraud such as embezzlement and manipulation could not have existed if the company's disclosure practices had been carried out in accordance with the rules and the transparency required by the regulations [5]. For example, we disclose financial information in the balance

#### *Financial Fraud and Managers, Causes and Effects DOI: http://dx.doi.org/10.5772/intechopen.93494*

sheet which will give information on marketable securities classified as current assets. However, these securities are not really negotiable or cashable in the short term, but their recovery can be spread over several years. To detect these anomalies or to verify the authenticity of this information, it is necessary to analyze the notes of the financial statements and compare them with the balance sheets and the financial statements.

Thus, certain information disclosed may be disguised or unrealistic, especially in the case of accounting for transactions between the parent company and its subsidiaries; indeed certain transactions have not been properly accounted for and presented in its previous financial statements.

The errors that are generally made concerned mainly the following elements in previous periods:

