Final answer:
The claim that balance sheets must be transformed into change statements to detect fraud is false; they are used with other financial statements for this purpose. T-accounts, although similar in appearance, are not the same as balance sheets.
Step-by-step explanation:
The statement that balance sheets must be converted to change statements before they can be used in detecting fraud is false. Balance sheets provide a snapshot of a company's financial position at a specific point in time, showing assets, liabilities, and shareholders' equity. To detect fraud, analysts often use balance sheets in conjunction with other financial statements such as the income statement and the statement of cash flows. These additional statements can help identify discrepancies or unusual changes over time that may indicate fraudulent activities.
Regarding T-accounts, they are simplified representations of ledger accounts used for educational purposes or in the accounting process to visualize debits and credits. While they may resemble the two-column format of a balance sheet with assets on one side and liabilities plus equity on the other, calling a balance sheet a 'T-account' is not accurate. A balance sheet is a more complex financial statement that includes much more detail than a single T-account would generally show.