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@article{206871,
        author = {Prof. Somesh Kumar Shukla and Shruti Agrawal},
        title = {The Thin Line Between Cosmetic Accounting and Fraud: Legal Loopholes Exploited by Corporations},
        journal = {International Journal of Innovative Research in Technology},
        year = {2026},
        volume = {13},
        number = {2},
        pages = {4537-4544},
        issn = {2349-6002},
        url = {https://ijirt.org/article?manuscript=206871},
        abstract = {This study explores how cosmetic accounting, though permissible but immoral, gradually shifts into accounting fraud when managerial intent, materiality and misrepresentation increase. The purpose of the research is to understand this thin boundary and identify when legitimate accounting becomes deceptive. Using a qualitative, descriptive and exploratory approach based on secondary sources such as Companies Act provisions, SEBI Regulations, Indian Accounting Standards (Ind AS) and past fraud cases, the study analyses key differences between cosmetic and fraudulent practices and highlights the role of auditors, regulators and governance failures. The findings conclude that weak oversight, audit lapses and regulatory gaps allow cosmetic accounting to escalate into fraud, emphasizing the need for stronger SOPs, auditor independence and stricter enforcement to ensure transparency and financial reporting integrity.},
        keywords = {Cosmetic Accounting, Accounting Fraud, Financial Reporting, Manipulation and Misrepresentation},
        month = {July},
        }