Causes and motives of financial statements fraud

Reliable financial reporting is the basis for economic decision-making by investors, creditors, regulators and other stakeholders. Financial statements should provide a true and objective presentation of the financial position, performance and cash flows of business entities. However, numerous corporate scandals in recent decades have shown that financial statements can be deliberately distorted in order to mislead users of financial information.
Fraud in financial statements poses a serious threat to the reliability of financial reporting and to the confidence of investors, creditors and other stakeholders. Fraud in financial statements, although less common than other forms of corporate fraud, has far-reaching consequences. They can lead to significant financial losses, erosion of confidence in financial markets, and serious legal and reputational consequences for companies and individuals. The identification and analysis of the causes and motives of such fraud is of particular importance for the accounting and auditing profession. Therefore, scientific and professional interest in the causes and motives of such fraud is constantly present.
The aim of this paper is to analyze the main causes and motives for fraud in financial statements by applying relevant theoretical models and empirical knowledge from the literature, as well as to consider the implications for the audit profession.

Keywords: fraud, financial reporting, economic decisions, audit risk, corporate controls