We learned in class by watching the 6 video clips regarding the big scandal with HealthSouth that one of the two main activities in their fraud was the false capitalization of regular expenses. Simply put, HealthSouth is a public company that provides outpatient rehabilitation services, they noticed that the business is not as big as they had claimed, the business is not that profitable and there are also too many expenses which will end up taking away the profit and will show lower than expected earnings, so they thought with the fraudulent idea of ​​creating false entries in their books claiming that the expenses they have are not real expenses, they called it investment as everyone understands when a company is buying a building it is not called expense which will show the business less profitable, it is l 'opposite that the company is growing, the same thing they think they have done by entering regular expenses such as payroll or utility expenses. But in order for the books to look somewhat acceptable and no one should immediately discover their fraud and especially the lower level accounting team of doing their daily records and knowing that utility expenses are not a capital improvement, they had to in a professional mannerWe go into the details of entering an expense and closing it by the end of the year so you can understand how they have done it to avoid being suspicious of their accountants and should be well refined REGULAR EXPENSE ITEMS As we have learned in class keeping accounts in the simple way of a general ledger, the entries go as follows, each entry is a debit to 1 account followed by a credit to the other for Example when you have rent expenses of $15,000, it means you withdraw money from cash account to p......half of paper......increasing capital So (falsely) the books looked very good, the business is ending up making money and once again the trial balance and account equation are correct EASY WAYS TO DETECT• Check the assessed account which has been increased by the end of the year from expense account through summer income account, this is an easy way because you don't need to review every single expense account what has been entered during the year, you will have to check only this particular item with its details • Make an evaluation report by each end of the year and the total estimated value must correspond to the total number of the evaluated account, and if not matches you know that some false transactions were entered, but remember that you will have to calculate on the appraisal report the depreciation expenses towards the increase or decrease in market value for the last year's estimated totals .