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

by Schilit, Howard

• ISBN13: 9780071386265
• ISBN10: 0071386262
• Edition: 2nd
• Format: Hardcover
• Copyright: 2002-03-01
• Publisher: McGraw-Hill Australia

Summary

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 Shenaniganspulls back the curtain on the current climate of accounting fraud. It presents tools that anyone who is potentially affected by misleading business valuationsshy;shy;from investors and lenders to managers and auditorsshy;shy;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 Shenaniganshas been thoroughly updated for today's marketplace. New chapters, data, and research reveal contemporary "shenanigans" that have been known to fool even veteran researchers.

Author Biography

Howard M. Schilit, Ph.D., CPA, is president of the Center for Financial Research and Analysis (CFRA), a leading independent financial research organization, and is one of today's leading authorities on detecting accounting gimmicks. Dr. Schilit, a former professor at American University, has been quoted or featured in numerous business publications including The Wall Street Journal, BusinessWeek, Fortune, and The New York Times, and has appeared on CNBC, CNN, and other networks. He is also the coauthor of Blue Chips and Hot Tips.

Table of Contents

Preface: Must Be a Sign of the Times	v
PART ONE: Establishing the Foundation	1	(60)
You Can Fool Some of the People All of the Time	3	(20)
Seek and Ye Shall Find	23	(18)
Searching for Shenanigans	41	(20)
PART TWO: The Seven Shenanigans	61	(116)
Shenanigan No. 1: Recording Revenue Too Soon or of Questionable Quality	63	(20)
Shenanigan No. 2: Recording Bogus Revenue	83	(14)
Shenanigan No. 3: Boosting Income with One-Time Gains	97	(16)
Shenanigan No. 4: Shifting Current Expenses to a Later or Earlier Period	113	(24)
Shenanigan No. 5: Failing to Record or Improperly Reducing Liabilities	137	(16)
Shenanigan No. 6: Shifting Current Revenue to a Later Period	153	(10)
Shenanigan No. 7: Shifting Future Expenses to the Current Period as a Special Charge	163	(14)
PART THREE: Techniques for Detecting Shenanigans	177	(30)
Database Searching	179	(6)
Analyzing Financial Reports	185	(22)
PART FOUR: Problem Areas	207	(26)
Acquisition Accounting Tricks	209	(10)
Revenue Recognition	219	(14)
PART FIVE: Looking Back...Looking Forward	233	(32)
History of Financial Shenanigans	235	(10)
Leading the Battle to Combat Shenanigans	245	(14)
As Bad As It Gets	259	(6)
Appendix Tutorial: Understanding the Basics of Financial Reporting	265	(23)
Index	288