Reported cases of financial statement frauds have been rearing over the last ten years causing the employees, creditors, lenders, and shareholders to suffer a great deal and to some extent leading to bankruptcy (Skalak et al., 2011). Some of the reported cases include Parmalat, Xerox, Global Crossing, Adelphia, Tyco, WorldCom, and Enron, but the most recent fraud case is Overstock.com committed in the fiscal 2009. Over the past financial years, Overstock.com management has claimed that the company has either recorded minimal losses or generated profit compared to other years. It however emerges that Overstock.com apparently violates various accounting principles to create a positive picture about the company’s financial performance. The management of Overstock.com disclosed the latest financial report claiming that compared to the financial year 2008 first quarter reported loss of $4.70 million; the company just generated a loss of $2.10 million in the fiscal 2009 first quarter. In actual sense, the asserted financial performance progress claim was indeed unimproved. For instance, Overstock.com used the 2004 cash in debt gains of $1.90 million and another $1.90 million profits from the preceding periods to inflate the gains and minimize the incurred losses. The 2009-reported losses of $2.10 million materialize to be a financial fraud (The fraud files blog, 2009). In its financial statement, the company restated the cut down debt gains twice to minimize the losses. Since 2003, the management of Overstock.com has been making recurring errors in its financial reporting through irregularities and financial accounts manipulations. A cargo shipper made un-booked refunds belonging to year 2008 fourth quarter to Overstock.com, but this amount was recorded in the first quarter of the fiscal 2009. Misappropriation fraud Frauds relating to misappropriation occur when the organizational workforce or third parties deceivingly misuse their positions or ranks to embezzle assets from the corporation. Individuals working in a corporation to whom the organization has entrusted its assets may commit such type of fraud (Singleton & Singleton, 2010). For instance, the perpetrators assigned to handle the assets on behalf of the corporation and for the organization’s interest include company’s board members, workforce, or directors (Heitger, Mowen & Hansen, 2007). Misappropriation fraud is involved with actions such as intellectual property theft, stealing formulas, data, and patents belonging to a company, payroll fraud, inventory, assets, and monetary thefts, and forging checks (Nikolai, Bazley & Jones , 2009). A recent case of asset misappropriation fraud occurred at Koss Corporation. The perpetrator, Sachdeva ‘Sue’ Sujata worked in this company for 12 years starting from 1997 to 2009 holding the chief finance officer position. By December 2009 when the fraudulent funds transfer scheme was discovered, the perpetrator had embezzled $40.90 million from this publicly traded corporation. In the fiscal 2009, December after the perpetrator had been arrested, it was though that only $4.50 million had been misappropriated (Marquet, 2011). After an intervening investigation was performed, it w