Financial Shenanigans : How to Detect Accounting Gimmicks and Fraud in Financial Reports / Edition 2

Financial Shenanigans : How to Detect Accounting Gimmicks and Fraud in Financial Reports / Edition 2

by Howard M. Schilit
     
 

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ISBN-10: 0071386262

ISBN-13: 9780071386265

Pub. Date: 03/01/2002

Publisher: McGraw-Hill Companies, The

Today's tumultuous corporate and financial markets and blinding new technologies combine to make accounting fraud much more high-impact and difficult to detect than in the past. As an investor or decision-maker, you must arm yourself with the latest investigative tools and techniques -- or run the daily risk of falling prey to these increasingly complex, costly scams

Overview

Today's tumultuous corporate and financial markets and blinding new technologies combine to make accounting fraud much more high-impact and difficult to detect than in the past. As an investor or decision-maker, you must arm yourself with the latest investigative tools and techniques -- or run the daily risk of falling prey to these increasingly complex, costly scams and schemes.

Financial Shenanigans, 2nd Edition, helps you fight fire with fire, giving you the state-of-the-art weapons you need to identify warnings of a company's problems before earnings come out and the damage becomes irreversible. It details the seven fundamental tricks that companies have used to fool auditors and investors for decades and provides updated information on how these shenanigans are being used in today's technologically advanced, financially savvy investment world. This fast-paced book provides updated explanations of how anyone can uncover and sidestep: Revenue tricks -- Side agreements lacking economic substance, investment income listed as revenue, release of revenue improperly "held back" before a merger, and more. Expense traps -- Shifting of current expenses to an earlier period, costs amortized too slowly, impaired assets not written down, and others. Liability scams -- Failure to record expenses and their related obligations, creation of sham rebates, reducing liabilities by changing accounting assumptions, and more

Also included in this one-of-a-kind primer are recommendations of oversight committees charged with investigating questionable financial practices. Insights are provided into history's most well-known and financially devastating frauds -- including the all-too-familiar warning signs behind this decade's massive Enron debacle. Numerous checklists, graphs, tables, and an accounting tutorial appendix make in-depth explanations both clear and accessible, even for those with little or no background in accounting or financial analysis.

Though much has changed in today's business world, dishonest company executives will still stretch and even hide the truth in their search for faster revenue growth, attractive balance sheets, and higher stock prices. Financial Shenanigans digs deep into both the age-old psychology and up-to-the-minute tactics of corporate greed, and provides a step-by-step procedure for looking into a company's black-and-white financials to protect your investment -- while you still have an investment to protect.

Product Details

ISBN-13:
9780071386265
Publisher:
McGraw-Hill Companies, The
Publication date:
03/01/2002
Edition description:
REV
Pages:
240
Product dimensions:
6.30(w) x 9.30(h) x 1.15(d)

Table of Contents

Preface: Must Be a Sign of the Timesv
Part 1Establishing the Foundation1
Chapter 1You Can Fool Some of the People All of the Time3
Chapter 2Seek and Ye Shall Find23
Chapter 3Searching for Shenanigans41
Part 2The Seven Shenanigans61
Chapter 4Shenanigan No. 1: Recording Revenue Too Soon or of Questionable Quality63
Chapter 5Shenanigan No. 2: Recording Bogus Revenue83
Chapter 6Shenanigan No. 3: Boosting Income with One-Time Gains97
Chapter 7Shenanigan No. 4: Shifting Current Expenses to a Later or Earlier Period113
Chapter 8Shenanigan No. 5: Failing to Record or Improperly Reducing Liabilities137
Chapter 9Shenanigan No. 6: Shifting Current Revenue to a Later Period153
Chapter 10Shenanigan No. 7: Shifting Future Expenses to the Current Period As a Special Charge163
Part 3Techniques for Detecting Shenanigans177
Chapter 11Database Searching179
Chapter 12Analyzing Financial Reports185
Part 4Problem Areas207
Chapter 13Acquisition Accounting Tricks209
Chapter 14Revenue Recognition219
Part 5Looking Back ... Looking Forward233
Chapter 15History of Financial Shenanigans235
Chapter 16Leading the Battle to Combat Shenanigans245
Chapter 17As Bad As It Gets259
Appendix Tutorial: Understanding the Basics of Financial Reporting265
Index288

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