Final answer:
An intentional misstatement of financial statements is known as fraud, specifically management or financial statement fraud. Unlike errors which are unintentional, fraud involves deliberate deception.
Step-by-step explanation:
An intentional misstatement of the financial statements is referred to as fraud. There are different types of fraud, including management fraud, where individuals at a high level within a company manipulate financial records for personal gain or to present a better financial picture than is accurate. This can also be known as financial statement fraud. While all fraud is illegal, illegal acts by a company are typically those that break specific laws beyond the financial realm, such as violations of environmental laws or bribery. An error, on the other hand, is an unintentional misstatement or omission in financial statements.