Forensic Accounting Problem Accrual accounting is based on the idea that revenue should be recognized when earned and that any resources consumed in the revenue-generating process (expenses) should be matched with those revenues in the same period. Another basic principle on which GAAP is based is that of the accounting period. This principle sets the time period for which the revenues and expenses are to be measured and matched. For many firms, this date is December 31. Revenues earned after December 31 are to be reported in the following period, and expenses in the following period are then matched to those revenues. One way that companies have been found to misrepresent their reported performance is to violate these principles by "holding the books open" beyond December 31. In other words, the firm will improperly record revenue earned after year-end as if it were earned in the current year, and at the same time, fail to properly match the expenses associated with those revenues. How might a forensic accountant who has been hired to investigate improper financial reporting catch this type of activity?