Charged with Accounting or Auditing Fraud? You May Face Serious Consequences
Individuals and companies can both be criminally prosecuted for accounting fraud. While a company can face crippling fines, an individual who is accused of false accounting could end up facing a lengthy prison sentence.
An accounting fraud lawyer can help you to minimize the potential consequences of fraud through negotiating a plea agreement, or can help you to raise defenses to avoid conviction. To learn more, contact an attorney as soon as possible if you are accused of being involved in fraud in accounting.
Definition of Accounting Fraud
Accounting fraud refers to the knowing falsification of accounting books. Accountants are required to comply with the Generally Accepted Accounting Principles (GAAP). The Sarbanes-Oxley Act also established strict standards for public company boards, public accounting firms and the management of public companies. Senior executives are required to take individual personal responsibility for whether financial reports are accurate under Sarbanes Oxley, and public accounting firms that conduct audits are now subject to additional oversight by the Public Company Accounting Oversight Board.
A failure to follow all rules and regulations for keeping accurate records, making enhanced financial disclosures, and reporting all income to the Internal Revenue Service are all examples of criminal fraud in accounting.
Types of False Accounting and Auditing Fraud
Myriad different types of accounting fraud may occur including:
- Recognizing revenue at improper times or recognizing revenue that never existed.
- Overstating the value of assets owned by the company
- Creating false accounting statements
- Companies agreeing to boost revenue by agreeing to purchase each other’s products and services.
- Selling at the end of the quarter only to meet a forecast or keeping books open when the quarter is over to try to meet a forecast.
- Understating losses, expenses, or company liabilities
- Making false or misleading statements to regulators, including material omissions or misrepresentations.
- Money laundering
- Failure to disclose income or keeping two sets of books to evade tax obligations
- Fraud in auditing, including Chapter 11 auditing
Public companies are subject to not only Sarbanes-Oxley but to other reporting and accounting rules established by the Securities Exchange Acts of 1933 and 1934. The Securities and Exchange Commission (SEC) can conduct an investigation of potential wrongdoing or violations. Both civil and criminal actions are possible for SEC accounting fraud. Arkady Bukh has a long track record of representing clients accused of serious federal and state crimes in NYC TOP RATED ON: SUPER LAWYERS, AVVO, NATIONAL TRIAL LAWYERS
Top Rated Criminal Lawyer
Arkady Bukh has a long track record of representing clients accused of serious federal and state crimes in NYC
TOP RATED ON: SUPER LAWYERS, AVVO, NATIONAL TRIAL LAWYERS
While false accounting fraud cases involving public companies are often the most vigorously prosecuted because they make headlines and shareholders may suffer losses, any type of dishonest accounting can lead to fraud charges. This includes financial statement fraud and false accounting fraud for small privately held companies and even fraud involving individuals.
Consequences of Fraud in Accounting
The consequences of accounting fraud vary depending upon the type of allegedly fraudulent behavior. Potential criminal charges you could face include:
- Attempt to evade or defeat taxes. (26 U.S. Code Section 7201).
- A willful failure to pay or collect taxes (26 U.S. Code Section 7202)
- A willful failure to provide information, file a return, and/or pay taxes (26 U.S. Code Section 7203)
- Making fraudulent statements to employees or failing to furnish a statement to employees (26 U.S. Code Section 7204)
- Willfully making any statement, producing any document, or making any statement under penalty of perjury that you do not believe is true. (26 U.S. Code Section 7206)
- Willfully assisting, advising on or counseling on the filings of false returns, affidavits, or claims in connection with any matter arising under the Internal Revenue Code (26 U.S. Code Section 7206)
- Violating securities fraud laws (18 U.S. Code Section 3301).
- Securities and commodities fraud (18 U.S. Code Section 1348).
- Violations of Sarbanes Oxley including altering documents and defrauding shareholders of publicly traded companies.
The New York State Society of CPAs provides a comprehensive summary of penalties under Sarbanes-Oxley including up to 10 years in prison and a $1,00,000,000 fine for a CEO who recklessly violates his certification of company financial statements.
How an Accounting Fraud Lawyer Can Help
Accountants and corporate executives could all potentially be sent to prison for fraud related to financial statements. If you are accused of violating the law through participation in any type of fraud, you need to understand the defenses and options for plea bargaining that you may have. An experienced accounting fraud defense attorneycan help with civil and criminal cases that are brought against you.
Accounting fraud cases often involve complex financial transactions and the government prosecutors may not have the numbers right or be able to effectively prove every element of the case against you beyond a reasonable doubt. An accounting fraud lawyer can help you to find forensic accountants and other experts to testify on your behalf and can assist in introducing doubt about whether you are guilty of the offenses you have been charged with.
You deserve the best defense when facing a potential federal charge and lengthy prison sentence. Contact an accounting fraud lawyer today to learn more about your legal options.