Commercial Crimes Survey indicated that most of the times, the major commercial crimes are committed by the upper management especially the CEO and/or CFO. (a)  Why do senior management overstate or understate business performance? Elaborate your answer. (b)  Explain common ways in which business performance can be manipulated through financial statement fraud. Elaborate your answer.

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Fraud

Fraud in accounting is the planned manipulation of financial documents to make a false appearance of corporate financial health. Moreover, it includes an employee, accountant, or the company itself misleading investors and shareholders.