From the “ Sherlock Holmes of Accounting,” the tools you need to stay a step ahead of the crooks
“Howard Schilit is the authority on forensic accounting. Financial Shenanigans is invaluable reading for market participants seeking to identify deceptive behavior in company financial statements.” Julian Robertson, legendary investor and founder, Tiger Management
“A must-read! The authors teach forensic financial statement analysis in an easy-to-digest format with lots of war stories. Guaranteed to help investors in their quest to avoid ticking time bombs in their portfolios.”
Marc A. Siegel, board member, Financial Accounting Standards Board
“This is a timeless guide to better understand how financial malfeasance can be spotted early. Financial Shenanigans teaches all of us fraud-detection-made-easy.”
Jules Kroll, pioneering private investigator and founder of Kroll Associates and K2 Global
“Required reading for every investor who desires to avoid financial losses. This new edition is a classic and better than ever.”
Thornton L. O’glove, author, Quality of Earnings
“If the original Financial Shenanigans was the Bible of detecting accounting frauds, then this latest version is the Talmud of cooked books. Regulators, audit committee members, and business journalists should be required to read this work if they are involved in public companies.”
Boris Feldman, partner, Wilson Sonsini Goodrich & Rosati, Palo Alto
“An incisive and entertaining review of the recipes used by corporations and executives to ‘cook the books.’ It’s a must-read for investors, lawyers, corporate directors, and anyone else interested in the integrity of the accounting and governance process.”
Joseph A. Grundfest, professor of law and business and codirector, Rock Center on Corporate Governance, Stanford Law School
About the Book:
With major financial scandals popping up in greater numbers—and with more inevitably on the way—it has never been more important for you to understand what dishonest companies do to trick investors. Since the early 1990s, Financial Shenanigans has been helping investors unearth deceptive financial reporting at the most critical time— before they suffer major losses.
Now, the third edition broadens its focus to include the newest, most sophisticated techniques companies use to mislead investors.
Referred to as the “Sherlock Holmes of Accounting” by BusinessWeek, Howard Schilit and renowned forensic accounting expert Jeremy Perler take you deeper into the corporate bag of tricks, exposing new levels of accounting gimmickry and arming you with the investigative tools you need to detect:
- Earnings Manipulation Shenanigans: Learn the latest tricks companies use to exaggerate revenue and earnings.
- Cash Flow Shenanigans: Discover new techniques devised by management that allow it to manipulate cash flow as easily as earnings.
- Key Metrics Shenanigans: See how companies use misleading “key”metrics to fool investors about their financial performance.
Financial Shenanigans brings you completely up to date on accounting chicanery in the global markets, shining a light on the most shocking frauds and financial reporting miscreants. This insightful, detailed guide written by recognized experts on the subject provides the knowledge and tools you need to spot even the most subtle signs of financial shenanigans.
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About the Author
Howard Schilit, Ph.D., CPA, is the founder and chief executive officer of the Financial Shenanigans Detection (FSD) Group, LLC. Dr. Schilit is a pioneer in the field of detecting accounting tricks in corporate financial reports that mislead investors. He is the author of Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports, now in its 3rd Edition. Howard was the founder and CEO of CFRA, a global forensic accounting research organization. He has been a leading spokesman before the US Congress, the SEC, and global media outlets about the causes and early warning signs of accounting tricks in public filings. Dr. Schilit began his career as an Associate Professor of Accounting at American University and continues to teach and lecture all over the world. Dr. Schilit holds his doctorate in Accounting from the University of Maryland.
Jeremy Perler, CFA, CPA, is the Director of Research at Schilit Forensics and co-author of Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports (3rd edition, 2010). Previously, Jeremy served as the in-house Forensic Accounting Analyst for CoatueManagement, a long/short equity hedge fund; Director of Research for CFRA; and auditor for PricewaterhouseCoopers. In addition, Mr. Perler serves on the FASB's Financial Accounting Standards Advisory Council (FASAC) as a representative of the Investor Community. Jeremy holds a Master of Accounting and a BBA from the University of Michigan Ross School of Business.
Most Helpful Customer Reviews
This is a great summary of the most-used tricks to sliding around in the gray areas of GAAP accounting in the US. These specific techniques likely represent 80% or more of the different tricks used from 1990-2007 by large corporations to manipulate their earnings and other performance, one of the main benefits of which is increasing their stock price. If the book was used by rank and file investors to look in detail at annual reports of their portfolio companies, they'd have a good early warning signal for the typical practices. And it includes sometimes shocking but always interesting true case studies of these techniques. A drawback might be that it is dated or does not include some more sophisticated techniques.
Straight-forward introduction to various accounting techniques that can be used to manipulate earnings.
Well written, with easy to follow examples, this book is a treasure. Even if - like me - you work on Wall Street and are already conversant with financial statements, this book is well worth your time and effort. The $20 you spend on it might very well save you and your clients a fortune.
Author Howard Schilit writes in surprisingly plain English, and provides the reader with a toolkit to determine what¿s so rotten in Denmark ¿ or on Wall Street. You don¿t have to be an experienced reader of financial reports to learn a lot from this book. Schilit offers more than theory; he provides specific examples and case studies. Learn about the manager who reduced future expenses by purchasing $12 million worth of advance postage metering at the end of the year. Find out how ¿Chainsaw Al¿ Dunlop drove up the price of Sunbeam stock by creating a $35 million reserve, all while laying off 11,000 employees. Learn the inside story of how Enron became the poster child for corporate wrongdoing. We highly recommends this book to independent investors, and anyone else who needs to understand how unethical execs cook the books. It may not save you from losing a bundle, but at least you won¿t feel like you¿re in a battle of wits and devoid of weaponry.