Fraud's Impact on Accounts Receivable

Whether a fraudulent transaction is recorded as an overstatement of assets or revenue (or understatement of liability or expense), the impact of the fraud scheme will ultimately hit the bottom line of an entity's income statement as an entry to an expense account. There are several different ways that fraud may specifically affect the accounts receivable business process. First, accounts receivable may be overstated as a result of fictitious or overstated revenue. Second, accounts receivable may also be overstated as a result of skimming or larceny of payments from customers