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In order to hide serious financial problems, these companies will use fraudulent bookkeeping to overstate sales and income, inflate the worth of the company’s assets, or state a profit when the company is operating at a loss. These altered records are then used to receive investment in the company’s bond or to receive loans to delay the collapse of the company that is going financially bankrupt. These scandals usually involve complex methods to misuse or misdirect funds, overstate revenues, understate expenses, overstate the company’s assets or understate the company’s liabilities in order to attract more customers and be able not to get caught...
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