EXAMPLES OF FRAUD IN FINANCIAL REPORTINGOENRONEnron was a company founded in 1985 and headquartered in Houston, United States. It was one of the largest energy trading and distribution companies in the world, with revenue of nearly one hundred billion dollars in 2000, and was also considered America's most innovative company for 6 consecutive years by Fortune magazine. In the last quarter of 2001, its reported financial condition was discovered to have been significantly maintained by a systematized and cleverly premeditated accounting fraud, known thereafter as the Enron scandal. They hid the most important debts and did not record them in the balance sheet. The inflated numbers on their balance sheets drove up their stock prices to unprecedented levels, taking advantage of the situation in which executives with inside information traded millions of dollars of Enron stock. Senior executives and insiders were aware of the offshore accounts that covered the Organization's losses; investors were kept in the dark. This resulted in a domino effect that resulted in the loss of seventy-four billion dollars by shareholders, the loss of hundreds of jobs, and the loss of retirement accounts of thousands of investors and employees. mid-1990s and used it on a large scale for its business transactions. These rules, when companies have outstanding energy-related derivative contracts or other derivative contracts (assets or liabilities) on their balance sheets at the end of a particular financial quarter, must be adjusted to fair market value, reporting profits or unrealized losses on the balance sheet for the period” (C. William Thomas, 2002). Andrew Fastow, the CFO, CEO Jeff Skilling and his ex... middle of paper... rupees in 2008. Ramalingam Raju and his brother were charged with breach of trust, conspiracy, fraud and falsification of documents records .These were examples of just two frauds that occurred in the United States and India. Numerous frauds have materialized in different countries, namely WorldCom scandal, Lehman Brothers, Tyco scandal, HBSC scandal, HIH insurance company scam, Libor scam etc. All of these involved the manipulation of financial accounts for personal benefit. Some common techniques used were overly optimistic asset valuations and extensive under-reporting of liabilities, pricing and reserve issues, insider trading, and failure to comply with tax payment laws. All companies involved in accounting frauds went bankrupt and had a huge impact on the economies of their respective countries, ultimately leading to the arrest of the executives involved.