Business Fairy Tales : Grim... | Buy

Summary

On the heels of the Enron trial, there are many lessons to be learned from the barrage of fraud hammering corporate America -- including how to spot signs of future impropriety. In a gripping and intriguing read, BUSINESS FAIRY TALES uses real-world scandals to illustrate the top twenty most common methods used by companies to fraudulently overstate their earnings and hide their debt. Based on an analysis of the frequency of Securities and Exchange Commission (SEC) enforcement actions, it identifies the twenty most prevalent accounting schemes. The book explains each accounting trick with a detailed, engaging story of a company and the officials who committed a spectacular version of that method of fictitious financial reporting. It goes behind the scenes to describe the organization's acts of deception, and to examine the character failures of the leaders. In addition to the specific cases, the book presents a compelling argument for the kind of reform that is needed, as well as the ethical frameworks that must support authentic reform. Ultimately, BUSINESS FAIRY TALES equips and empowers readers with the skills to spot signs of potential accounting fraud so that investors and employees can be forewarned of future financial shocks. It provides analysts and students with the specific, tell-tale signals of the top twenty financial-reporting frauds and schemes -- signals that are inevitably left behind in financial statements that have been manipulated.

Acknowledgments

Gold Dust: Introduction to the Problem of Fictitious Financial Reporting

(9)

Table 1.1 The Top Twenty Methods of Fictitious Financial Reporting

(2)

The Sizzling Saga of Sunbeam

(36)

Part 1: The History of Sunbeam

(2)

Part 2: The History of Al Dunlap

(7)

Part 3: Dunlap's Carrot-and-Stick Approach

(5)

Part 4: An Overview of Sunbeam's Fictitious Financial Reporting Schemes

(7)

Part 5: The Sunbeam Inferno

(6)

Part 6: Signals of Sunbeam's Schemes

(9)

Hocus Pocus

(19)

Sensormatic: Madness at Midnight

(5)

Xerox: Not to be Copied

(4)

CUC/Cendant: Phony Funds

(4)

Insignia: Return to Sender

(5)

WorldCom Wizardry: From WorldCom to World-Con

(43)

Part 1: The Wizards of Worldcom

(7)

Part 2: The Acquisitions Spree

(9)

Part 3: Problems in Wizard World

(4)

Part 4: An Overview of WorldCom's Fictitious Financial Reporting Schemes

(4)

Part 5: The Collapse of Wizard World

(5)

Part 6: The Gatekeepers Who Failed WorldCom

(5)

Part 7: Signals of the WorldCom Fraud

(9)

Abracadabra

108

(23)

Livent: Phantom of the Finances

108

(9)

Rite Aid: ``The Keys to the Kingdom''

117

(5)

Allegheny (AHERF): Trick or Treatment?

122

(3)

Lockheed: Sky High

125

(6)

Enron and the Tale of the Golden Goose

131

(72)

Part 1: Hatching the Goose: The Start of Enron

131

(12)

Part 2: Fattening the Goose: Enron Capital and Trade (ECT)

143

(2)

Part 3: Plucking the Goose: How Enron Lost Its Gold

145

(11)

Part 4: Stuffing the Goose: The Electricity Fiasco in California

156

(5)

Part 5: How Enron Cooked the Books: The Main Fictitious Financial Reporting Schemes

161

(23)

Part 6: Signals of the Enron Fraud: Indications That Enron was a Cooked Goose

184

(19)

Tall Tales

203

(20)

The Edison Lesson

203

(4)

The Adelphia Account

207

(6)

The BellSouth Warning

213

(2)

Krispy Kreme and the Missing Dough

215

(8)

The Pension-Fund Fantasy

223

(8)

Part 1: The Disappearing Pension

223

(4)

Part 2: The Alchemy of Pension Accounting

227

(4)

Reform: Is There a Magic Potion?

231

(25)

Part 1: Introduction

231

(3)

Part 2: Corporate Governance Reform Since 2002

234

(10)

Part 3: Emerging Reform Issues

244

(5)

Table 9.2 The Top Twenty-Five Signals Indicating Possible Fictitious Reporting in Financial Statements

249

(7)

Epilogue The True Philosopher's Stone: Making Ethical Decisions in the Business World

256

(15)

Accounting Abbreviations

271

(2)

Index

273

Supplemental Materials

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