To a company, "information users" (the bank, the creditor, the staff, the investors, ...) need to look at the company's financial reports to understand the financial state of the entity. Therefore, "fraudulent financial reports" means that the company fake its financial reports (increase the total assets so that the company looks rich, etc) to deceive the financial users
To a company, "information users" (the bank, the creditor, the staff, the investors, ...) need to look at the company's financial reports to understand the financial state of the entity. Therefore, "fraudulent financial reports" means that the company fake its financial reports (increase the total assets so that the company looks rich, etc) to deceive the financial users