Which of the following is an example of fraudulent financial reporting?

The example provided illustrates fraudulent financial reporting because it involves management deliberately manipulating key financial figures to present a distorted view of the company's financial health. By changing inventory count tags to overstate ending inventory, the company appears to have more assets than it actually does. This adjustment not only inflates the balance sheet but also understates the cost of goods sold, which artificially enhances net income. Such actions compromise the integrity of financial statements, misleading stakeholders and users of the financial information.

This type of manipulation reflects a conscious effort by management to deceive, making it a clear case of fraudulent financial reporting, whereas the other scenarios describe different forms of fraudulent activities, such as misappropriation of assets, rather than the intentional misrepresentation of financial statements.