Also, every inquiry into the company's accounting or business practices has to be ascertained. Such matters most of the times stand at large and eventually it may lead to restatement, penalty through law or even bankruptcy. Red flags of financial reporting: Visibility requires a healthy dose of skepticism. That is, not everything presenting itself as a red flag represents fraud or attempts at financial manipulation, but it is an early warning that something needs to be pursued further. It will further allow investors, auditors, and regulators to protect themselves from risks and then make mor