Financial statement fraud occurs when an individual or organisation deliberately misrepresents the financial state of their business in order to gain a financial benefit. This can include manipulating figures, falsifying documents, or creating inaccurate records to make it appear as though the company is financially stable when in reality it is not. It is a type of fraud that can have serious consequences, such as a loss of investor confidence and potential legal repercussions. To prevent such cases from occurring, businesses must invest in strong internal controls, such as regular independent audits and oversight of sensitive financial information.