# Means of falsifying financial statements in fictitious business transactions From the perspective of academic and risk identification, the following are some common financial fraud techniques： ## Income is related to assets -Inflated income: record non-existent sales or confirm income in advance -Overvaluation of assets: Artificially inflating the value of assets or not mentioning the necessary asset impairment -Circular transactions: mutual purchases and sales with partners without substantive content -Concealment of related party transactions: conduct unfair transactions through undisclosed related parties ## Liabilities and expenses related -Hidden liabilities: move accrued liabilities off-balance sheet -Underestimation of fees: unreasonable delay in fee confirmation -Capitalization operation: Improper capitalization of items that should be included in expenses -Improper use of accounting estimates: such as extending the service life of assets to reduce depreciation ## Cash flow and structural arrangements -Manipulate the classification of cash flow: confuse operating cash flow with investment/financing cash flow -Establishment of special purpose entities: for the transfer of debts or losses Understanding these techniques will help investors, regulators and auditors to be more vigilant, strengthen the review and questioning of financial statements, and protect market transparency and investors' rights and interests.