Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports, Second Edition

Techniques to uncover and avoid accounting frauds and scams Inflated profits . . . Suspicious write-offs . . . Shifted expenses . . . These and other dubious financial maneuvers have taken on a contemporary twist as companies pull out the stops in seeking to satisfy Wall Street. Financial Shenanigans pulls back the curtain on the current climate of accounting fraud. It presents tools that anyone who is potentially affected by misleading business valuationsВ­В­from investors and lenders to managers and auditorsВ­В­can use to research and read financial reports, and to identify early warning signs of a company's problems. A bestseller in its first edition, Financial Shenanigans has been thoroughly updated for today's marketplace. New chapters, data, and research reveal contemporary ''shenanigans'' that have been known to fool even veteran researchers. 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 moreAlso 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. Techniques to uncover and avoid accounting frauds and scams Inflated profits ... Suspicious write-offs ... Shifted expenses ... These and other dubious financial maneuvers have taken on a contemporary twist as companies pull out the stops in seeking to satisfy Wall Street. Financial Shenanigans pulls back the curtain on the current climate of accounting fraud. It presents tools that anyone who is potentially affected by misleading business valuations -- from investors and lenders to managers and auditors -- can use to research and read financial reports, and to identify early warning signs of a company's problems. A bestseller in its first edition, Financial Shenanigans has been thoroughly updated for today's marketplace. New chapters, data, and research reveal contemporary "shenanigans" that have been known to fool even veteran researchers. You Can Fool Some Of The People All Of The Time -- Seek And Ye Shall Find -- Searching For Shenanigans -- Recording Revenue Too Soon Or Of Questionable Quality -- Recording Bogus Revenue -- Boosting Income With One-time Gains -- Shifting Expenses To A Later (or Earlier) Period -- Failing To Record (or Eliminating) Liabilities -- Shifting Current Revenue To A Later Or Earlier Period -- Shifting Future Expenses To Current Period -- Screening For Shenanigans -- Analyzing Financial Reports : Comprehensive Checklist Of Warning Signs -- Acquisition Accounting Tricks -- Revenue Recognition Issues -- History Of Financial Shenanigans -- Leading The Battle Against Shenanigans. Howard M. Schilit. Includes Index. Pulling back the curtain on the current climate of accounting fraud, this book presents tools that anyone who is potentially affected by misleading business valuations can use to research and read financial reports, and to identify early warning signs of a company's problems This informational text provides strategies; tips and techniques to avoid accounting fraud in your company. -- Edited summary from book