Some of the more critical findings of the study are:

• Financial fraud affects companies of all sizes, with the median company having assets and revenues just under $100 million.
• The median fraud was $12.1 million. More than 30 of the fraud cases each involved misstatements/misappropriations of $500 million or more.
• The SEC named the CEO and/or CFO for involvement in 89% of the fraud cases. Within two years of the completion of the SEC investigation, about 20% of CEOs/CFOs had been indicted. Over 60% of those indicted were convicted. Over 80% of the CEOs/CFOs left the company within two years. In 47% of the cases, the SEC barred one or more individuals from serving as an officer or director of a public company. Civil fines were imposed in 65% of the cases, and disgorgements were imposed in 43%.
• The average fraud period extended 31.4 months (median 24 months).
• The two most common techniques used to fraudulently misstate the financial statements involved improper revenue recognition (61% of the cases) and asset overstatements primarily by overvaluing existing assets or capitalising expenses (51%). Understating expenses and liabilities occurred in 31% of the cases.
• Many of the commonly observed board of director and audit committee characteristics such as size, meeting frequency, composition, and experience do not differ meaningfully between fraud and no-fraud companies. Recent corporate governance regulatory efforts appear to have reduced variation in observable board-related governance characteristics.
• Virtually all of the fraud firms received an unqualified audit opinion on the last set of fraudulently misstated financial statements. However, the unqualified audit report of fraud firms was more likely (56%) to contain additional explanatory language than for no-fraud firms (36%).
• Twenty-six percent of the firms engaged in fraud changed auditors during the period examined compared to a 12% rate for no-fraud firms.
• Initial news in the press of an alleged fraud resulted in an average 16.7% abnormal stock price decline for the fraud company in the two days surrounding the announcement.
• News of an SEC or Department of Justice investigation resulted in an average 7.3% abnormal stock price decline.
• Companies engaged in fraud often experienced bankruptcy, delisting from a stock exchange, or material asset sales at rates much higher than those experienced by no-fraud firms.

EFRAG's conclusion is that the following requirements of the IFRS for SMEs are incompatible with the EU Accounting Directives:

1. The prohibition to present or describe any items of income and expense as 'extraordinary items' in the statement of comprehensive income (or in the income statement, if presented) or in the notes (IFRS for SMEs par. 5.10)
2. The requirement to measure financial instruments within the scope of section 12 of the IFRS for SMEs (non-basic financial instruments) at fair value (IFRS for SMEs par. 12.7 and 12.8) (see Appendix par. 8 - 18). (Par. 11.2 of the IFRS for SMEs includes an option for entities to choose to apply the recognition and measurement provisions of IAS 39 Financial Instruments: Recognition and Measurement. As the option does not refer to a specific version of IAS 39, EFRAG has not been able to assess whether this option would be compatible with the EU Accounting Directives or not. Accordingly, EFRAG has disregarded the option when assessing whether or not the requirements of the IFRS for SMEs regarding financial instruments are compatible with the EU Accounting Directives or not.)
3. The requirement to presume the useful life of goodwill to be ten years if an entity is unable to make a reliable estimate of the useful life (IFRS for SMEs par. 19.23)
4. The requirement to recognise immediately in profit or loss any negative goodwill (IFRS for SMEs par. 19.24)
5. The requirement to present the amount receivable from equity instruments issued before the entity receives the cash or other resources, as an offset to equity and not as an asset (IFRS for SMEs par. 22.7(a))
6. The prohibition to reverse an impairment loss recognised for goodwill (IFRS for SMEs par. 27.28)

[We express] the importance we place in achieving a single set of high quality, global accounting standards and urged the International Accounting Standards Board and the Financial Accounting Standards Board to redouble their efforts to that end. We encouraged the International Accounting Standards Board to further improve involvement of stakeholders.