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An insider's guide to understanding and eliminating accounting fraud How do these high-profile accounting scandals occur and what could have been done to prevent them. Hidden Financial Risk fills that void by examining methods for off balance sheet accounting, with a particular emphasis on special purpose entities (SPE), the accounting ruse of choice at Enron and other beleaguered companies. J. Edward Ketz identifies the incentives for managers to deceive investors and creditors about financial risk and also shows investors how to protect their investments in a world filled with accounting and auditing frauds. J. Edward Ketz, PhD (State College, PA) is MBA Faculty Director and Associate Professor of Accounting at Penn State's Smeal College of Business. He has been cited in the press nearly 300 times since Enron's bankruptcy, including The New York Times, The Wall Street Journal, and The Washington Post.. He has a regular column in Accounting Today.
PART I. MY INVESTMENTS WENT OUCH!
1. What? Another Accounting Scandal?
2. Balance Sheet Woes.
PART II. HIDING FINANCIAL RISK.
3. How to Hide Debt with the Equity Method.
4. How to Hide Debt with Lease Accounting.
5. How to Hide Debt with Pension Accounting.
6. How to Hide Debt with Special Purpose Entities.
PART III. FAILURES THAT LED TO DECEPTIONS.
7. The Failure of Managers and Directors.
8. The Failure of the Auditing Profession.
9. The Failure of Regulation.
10. The Failure of Investors.
PART IV. MAKING FINANCIAL REPORTS CREDIBLE.
Chapter 11. Andersen Has the Solution—Really!
Posted August 3, 2003
A book that every Enron investor wishes they owned four years ago, and a book that all investors should own. Offers the insights investors need to prevent getting duped by accounting and auditing firms that appear to support how managers hide bad debt and inflate stock offerings. This might be the first book that gives average investors the tools to make sense of balance sheets and annual reports. It became clear that--thanks to questionable accounting methods--many companies were able to inflate their earnings. Ketz's book blows the lid off of these tools of deception. I loved reading attacks by Penn State alumni working for Andersen that are profiled in the foreward. It just highlights the basic problem in the industry. Accounting firms propping up bad companies and take good money from average investors.Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.