Accounting Gone Wrong: How to Avoid Ponzi and Pyramid Schemes

Ever wondered how to keep yourself safe from fraudulent business practices such as Ponzi and Pyramid Schemes?

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Original article is found here.  Used with permission.

In the world of large-scale capitalism, corporate accountants shoulder huge responsibilities: They must monitor, analyze, and report the financial health of their organizations to both owners and stakeholders alike.

These reports, when positive, can be the catalyst for investments. For investors, supplying capital or purchasing stock in a business involves careful assessment of risk and benefit, of loss and gain. This insecurity is something that can be measured and analyzed.

But when a corporation provides false information – manipulated earnings, inaccurate invoices, or other misleading financial statements – investors have no idea what they’re getting into. And sometimes, with so much on the line, it can be tempting for accountants to make a business appear more financially sound than it actually is.

From accelerated revenues and shifting liabilities to Ponzi and Pyramid schemes, we’ve compiled an overview of misleading accounting plots and provided insight on how you can identify them.