risk
Financial-statement fraud and management override
Intentional misstatement through fictitious revenue, phantom inventory/assets, ghost-employee payroll, or management override of controls — inflating results and deceiving investors and regulators.
In catalog since 2026-09-17T22:28:00Z · Last changed 2026-09-17T22:28:00Z (f368a6cce277)
Record JSON · Open in map · Data retrieval guide
Catalog revision: 791ff2dd3a45707290badee660f185e514d15f1cf518908628f425c2f2c56ee4. A connection does not establish full coverage.
Attributes
- category
- financial_reporting
- domain
- Financial Reporting Controls (SOX)
- Compliance, Audit & Assurance
- taxonomy
- sox-rmm-assertion
- coso-erm-risk
- inherent_rating
- high
Details
- risk_id
- fin-financial-statement-fraud
- category
- financial_reporting
- likelihood
- low
- impact
- critical
- inherent_rating
- high
- treatment
- mitigate
- taxonomies
- sox-rmm-assertion
- coso-erm-risk
Source
No record-specific source URL is provided.
Connections
- UC-FIN-05 — Segregate incompatible financial duties mitigates Financial-statement fraud and management override
- strength
- primary
- rationale
- Separating authorization/recording/custody/reconciliation stops one person perpetrating and concealing fraud or override.
- UC-AUDIT-04 — Uphold integrity and ethical conduct in internal auditing mitigates Financial-statement fraud and management override
- strength
- related
- rationale
- Professional courage to communicate uncomfortable truths supports surfacing and reporting management override rather than acquiescing to it.
- UC-AUDIT-25 — Maintain quality records and information for internal control mitigates Financial-statement fraud and management override
- strength
- related
- rationale
- Protecting records against falsification and unauthorized alteration makes fraudulent transactions harder to record and conceal.
- UC-AUDIT-02 — Establish a board-approved internal audit mandate and charter mitigates Financial-statement fraud and management override
- strength
- related
- rationale
- Board and senior-management support with unrestricted access give internal audit the independence to detect and deter management override.
- UC-AUDIT-13 — Gather and analyze evidence to develop engagement findings mitigates Financial-statement fraud and management override
- strength
- related
- rationale
- Analytical evidence-gathering and deviation analysis can surface fictitious or override transactions for investigation.
- UC-FIN-04 — Authorize transactions with attributable approvals mitigates Financial-statement fraud and management override
- strength
- primary
- rationale
- Authorization plus tamper-evident, attributable approval trails deter and expose fraudulent entries and override.
- UC-FIN-01 — Deploy financial control activities through policies mitigates Financial-statement fraud and management override
- strength
- related
- rationale
- Policy-based control activities and period-end oversight raise the barrier to management override and fraud.
- UC-FIN-10 — Safeguard assets and stored financial data mitigates Financial-statement fraud and management override
- strength
- related
- rationale
- Physical counts detect phantom inventory/assets used in statement fraud.
- UC-AUDIT-07 — Exercise due professional care and professional skepticism mitigates Financial-statement fraud and management override
- strength
- related
- rationale
- Professional skepticism, critically assessing the reliability and sufficiency of information, is the classic posture for detecting fraud and override.
- UC-AUDIT-21 — Assess control effectiveness through testing and monitoring mitigates Financial-statement fraud and management override
- strength
- related
- rationale
- Independent testing of control operating effectiveness can detect management override and fraudulent transactions.