False Accounting – Laws, Penalties & Defences in Australia

False accounting is a serious white-collar crime in Australia. It involves the intentional falsification, alteration, concealment or omission of financial records with the purpose of misleading others—typically to gain a benefit or avoid a loss.

False accounting often arises in corporate fraud, employee dishonesty, tax evasion, or government subsidy schemes. It’s considered a breach of trust and financial integrity, and can result in substantial fines, imprisonment, and long-term professional consequences.

This guide outlines what constitutes false accounting, how charges are laid, how courts deal with these offences, common legal defences, and how laws differ across each Australian state and territory.

What Is False Accounting?

False accounting occurs when a person:

• Intentionally falsifies, alters, destroys, or omits entries in accounting records

• To deceive others (e.g. employers, shareholders, government)

• With the intent to obtain a financial advantage or cause loss

Common examples include:

• Creating fake invoices or receipts

• Hiding liabilities or inflating profits in financial statements

• Deleting or backdating transactions

• Misclassifying expenses to mislead auditors or regulators

• False entries in tax returns, payroll records, or superannuation contributions

The prosecution must prove:

1. You knowingly made or used a false financial record

2. You intended to deceive or defraud

3. The conduct was dishonest by community standards

How Are Charges Laid for False Accounting?

Charges may arise from:

• Internal audits or whistleblower reports

• ATO or ASIC investigations

• Banking or investor complaints

• Regulatory agency referrals (e.g. Centrelink, NDIS, ACCC)

Evidence may include:

• Accounting system logs and audit trails

• Emails and financial documents

• Forensic accounting reports

• Statements from co-workers or external auditors

The offence may be prosecuted by:

• State police or fraud squads

• ASIC or the ATO

• Commonwealth Director of Public Prosecutions (CDPP) in serious matters

Court Process for False Accounting Offences

False accounting offences can be prosecuted in:

• Magistrates’/Local Court – for summary or lower-value offences

• District/County/Supreme Court – for indictable or high-value matters

The court process includes:

1. First appearance – Plea entered

2. Disclosure of evidence

3. Hearing or trial – If no plea deal is reached

4. Sentencing – Based on loss, intent, role of the accused, and impact on others

Available Legal Defences

Defences to false accounting may include:

• Lack of intent – You made an honest mistake in record keeping

• No financial advantage – There was no benefit or deception involved

• Authorisation – You acted under orders from a superior

• Duress or coercion – You were pressured to alter records

• Mental impairment – Affected your judgment or intent