The essential characteristics of financial statement fraud are: The misstatement is material and intentional and the users of the financial statements are investors in publicly traded companies. This misstatement is material and intentional and the preparers of the financial statements have a fiduciary obligation to the organization. The misstatement is material and intentional and the preparers of the financial statements fail to report the misstatement to the SEC or other applicable authority. The misstatement is material and intentional and the users of the financial statements have been misled.

The misstatement is material and intentional and the users of the financial statements have been misled.

Explanation:

Financial statement fraud is defined as the intentional misstatement or ommision of information on the financial statement that is aimed at deceiving users of financial statement.

When a fraud is perpetrated the act is an intentional attempt to misrepresent a situation to illegally gain something that is not legally yours.

For example financial statement fraud can be done to obtain a loan or inflate the price of company shares.

Usually profits, assets, and revenue are overstated. While liabilities, expenses, and losses are understated