Which act involves the misrepresentation of financial performance through nonexistent revenue?

The act that involves the misrepresentation of financial performance through nonexistent revenue is known as fraudulent revenue recognition. This practice specifically refers to the deliberate misstatement of a company's revenue figures by recognizing revenue that has not been earned or does not exist. This can occur when businesses use various techniques to inflate their revenue figures, thereby misleading investors, regulators, and other stakeholders about their financial health.

Fraudulent revenue recognition can take many forms, such as reporting revenue before the completion of a sale or inflating sales figures by recognizing fictitious revenue transactions. This activity is particularly concerning because it undermines the accuracy and reliability of financial reporting and can lead to serious legal consequences, including investigations and penalties from regulatory authorities.

In contrast, self-dealing refers to situations where an individual in a position of authority benefits personally from transactions that are made at the expense of their organization. Recording false revenues is essentially a subset of fraudulent revenue recognition; while the term may seem closely related, the specific term that encompasses the broader context of this misrepresentation is fraudulent revenue recognition. Manipulating liabilities typically involves altering the financial commitments of a company in a deceptive manner and does not directly involve the misrepresentation of revenue.