Accounting fraud is defined as the "intentional misstatement of financial reports, in violation of generally accepted accounting principles, with the objective of making certain people act in detriment to their best interests" (Wuerges & Borba, 2010). The GAAP are the principles by which financial accounting statements are produced, and for a public company these need to be followed, so deviating from GAAP will constitute a violation. Where it becomes a criminal fraud case is usually when the errors are deliberate. They may overstate the company's financial position (i.e. cooking the books), or they may understate that position for the purposes of committing tax fraud. In the famous case of Enron, not producing financial statements in a timely manner can also be considered accounting fraud, along with the general lack of accuracy of those statements.

Accounting fraud can be committed in a number of ways, but the underlying reason almost always...
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