To evaluate the growth of the organisation, ratios are computed using the figures from the present year and afterwards compared to those from prior years, to those of other businesses, to those of the sector, and even to the world.
This kind of examination of financial statements can be quite helpful in spotting warning signs of fraud.
How may financial statement fraud be avoided and found?
Internal Controls That Are Required to Avoid Financial Statement Cheating
Separate the tasks.
Put a reconciliation process in place.
Employ a third-party auditor.
provide oversight over the board of directors.
Examine the stock, the journal entries, and the electronic transfers.
Establish a Firm Strategic direction of The company.
Establish a fraud hotline.
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