Financial frauds are an ongoing issue in Croatia as well as in the world making us witnesses of all forms of financial frauds in everyday situations without even being aware or realizing it. The aim of this thesis is thus improving the knowledge on the methods and signs of frauds and falsification of financial statements. Although financial frauds imply money laundering, alienation of property and falsification of financial statements, they are often directly related to corruption. Corruption activities may precede financial frauds, or be a prerequisite of their successful realization. Each of stated types of fraud has its own characteristics and signs warning us of the possibility of an ongoing fraud, hence all participants in economic transactions should be vigilant in timely prevention of the fraud they are witnessing. The thesis consists of a theoretical and practical part. The theoretical part elaborates the history of corruption, basic concepts related to financial fraud, the international and Croatian institutions engaged in prevention of financial frauds, and the legislative - legal framework in which the rights and obligations of each economic transaction participant are defined. Practical part of this thesis consists of two surveys, the first of which is addressed to citizens and their experiences with corruption while the second survey questionnaire is addressed to the bookkeeping offices. The aim of the survey was to determine the extent to which these target groups encounter business frauds and which method of detecting a fraud they use for timely detection. The second part of the research focuses on the analysis of financial statements with the aim of detecting "embellishments" of individual balance sheet items and detecting possible elements of business fraud. KEY