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Diagram 1

Against this background the fraud at Wrekin Construction, can be seen
to be a financial statement fraud. This differs from other types of fraud in
that the individuals who commit the fraud generally are not the direct
beneficiaries. However, members of management may benefit directly
from the fraud by keeping their jobs, selling stock, receiving performance

bonuses, or using the false report to conceal another fraud.
Financial statement fraud, involves the intentional misstatement or
omission of material information from the organization’s financial reports;
essentially by overstating assets or revenue or understating liabilities
and expenses.

As indicated in diagram 2, the lion’s share of over 30% of financial
statement fraud is perpetrated by executives and upper management.

Moreover, over half of financial statement frauds involved overstating
revenues by recording revenues prematurely or fictitiously. About half
the frauds also involved overstating assets by understating allowances
for receivables, overstating the value of inventory, property, plant and
equipment and other tangible assets, and recording assets that did not
exist. (2) Unwin’s position and actions firmly placed him in this category