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Financial Shenanigans How to Detect Accounting Gimmicks Fraud in Financial Reports ( Kindle ePUB Pdf ) ↠ Howard Schilit – PDF & TXT

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The bestselling classic from the Sherlock Holmes of Accounting―updated to reflect the key case studies and most important lessons from the past uarter centuryThis fourth edition of the classic guide shines a light on the most shocking frauds and financial reporting offenders of the last twenty five years and gives investors the tools they need to detectCorporate cultures that incentiv. Financial Shenanigans is by Howard Schilit president of the Center for Financial Research and Analysis It is a very readable step by step guide to detecting fraud by reading financial statementsMost of the big corporate scandals in the past few years have been in one way or another accounting scandals Either accounting was the primary method of committing fraud or else accounting was used to cover up other malfeasance Schilit identifies seven shenanigans and the ways they are typically performed They are1 Recording revenue too soon or of uestionable uality2 Recording bogus revenue3 Boosting income with one time gains4 Shifting a current expense to a later or earlier period5 Failing to record or improperly reducing liabilities6 Shifting current revenue to a later period7 Shifting future expenses to the current period as a special chargeAll of this has to do with accounting arcana which is what makes these kinds of scandals so opaue to the public The public understandably doesn t understand what s been done much less how anyone was hurt by it One misunderstanding that one sees in newspapers occasionally is what a reserve is and why not having one or underestimating one is bad The impression given is that reserves are actual money rainy day funds to pay for future litigation or bad debtThat s why a readable book like this is useful It really goes into accounting detail and explains what the various financial statements are and how to read them It gives lots of examples of specific companies caught engaging in specific shenanigans Some like Sunbeam seems to have engaged in about every kind of shenanigan possible He always shows stock price graphs so one can see what the result is to euity when the chickens come home to roost He also uses the graphs as a way to brag on the CFRA s ability to see trouble early They always seem to issue warnings well before the shenanigan is discovered But Cassandra like their warnings are ignored by investors If their record at detecting shenanigans is so good you would expect stock prices to drop every time they issue a warning on a company Hmm Occasionally he offers a pungent detail or two on the company s story but it would be better if he gave a little like this executive went to jail or that executive was forbidden by the SEC to ever run a publicly traded company again etcI think this would be a good book for undergraduate and graduate business students especially those interested in becoming analysts Aside from giving a lot of practical advice it would be an entertaining counterweight to the let s face it fairly tedious accounting textbooks that one necessarily has to read

Read Financial Shenanigans How to Detect Accounting Gimmicks Fraud in Financial Reports

Financial Shenanigans How to Detect Accounting Gimmicks Fraud in Financial Reports

Ost important lessons from the past uarter century and brings you up to date on accounting chicanery in the global markets Howard Schilit and his team of renowned forensic accounting experts expose financial reporting miscreants and unveil the latest methods companies use to mislead investors You'll learn everything you need to know to unearth deceptive reporting and avoid costly mistak. Greed is as old as mankind Unscrupulous people will try to trick others out of their money One arena for this is the business sector and especially after the IT crash there was a number of high profile accounting scandals Financial Shenanigans has become the de facto standard work on detecting accounting gimmicks and fraud in financial reports Howard Schilit is a former accounting professor who left academia and founded two consultancy firms specializing in so called forensic accounting Having sold the prior Centre for Financial Research and Analytics the author is today the CEO of Schilit Forensics helping clients research companies of interest Schilit is as Barron s puts it a financial sleuth and this book will provide the reader plenty of advice on how not to be taken advantage ofThe second edition of this book contains five parts After an introduction the meatiest part of the book is the second where The Seven Shenanigans are presented ie the most common ways to intentionally distort a company s financials to make the current profits and the financial strength look stronger or weaker than is warranted by actual performance In order the shenanigans are 1 Recording revenue too soon or of uestionable uality such as recording revenue before a service has been provided before a shipment has been made or before the customer s full acceptance or recording sales to an affiliated party and much 2 Recording bogus revenues as when recording cash from lending transactions as revenue or any recording of sales without economic substance 3 Boosting income with one time gain which includes increasing profits by selling undervalued assets or creating income by reclassification of balance sheet items 4 Shifting current expenses to a later or earlier period for example capitalizing normal operating costs amortizing costs too slowly unduly reducing asset reserves etc 5 Failing to record or improperly reducing liabilities such as failure to record expenses and related liabilities when future obligations remain or recording revenue when cash is received even though future obligations remain 6 Shifting current revenue to a later period by for example creating reserves and releasing them into income in a later period or improperly holding back revenue before an acuisition closes and 7 Shifting future expenses to the current period as a special charge that could include improperly inflating the amount of a special charge or accelerating expenses into the current periodThe first five of those shenanigans aim to inflate the current period and to make it look better than it is The last two instead deflate the current period to be able to look better than merited in the future The creative accounting that tweaks the revenues is in a way worse than that which misrepresents costs as the revenues form the basis for the entire profit and loss statement The topics discussed are all relevant but to some extent I feel that the book is too profit and loss centric The balance sheet get s very little attention The chapters include a number of guiding accounting principles and there is an appendix tutorial describing the basics of financial reporting Despite this it is a clear benefit for the reader to have some basic understanding of accounting principles and conceptsThe much shorter parts three through five handle areas such as how to search for signs of improper accounting by using databases and analysing company reports trickier areas such as acuisition accounting and financial reporting in companies that due to their business model don t fit into standard accounting models and finally there is a short historical review of financial tricksters with special attention given to Enron Especially the history part is so short that it becomes close to unnecessary However the part on analysing financial reports does its job To sum up this book should be mandatory complementary reading in every accounting class Apart from learning how accounting ought to work everybody should know how some people come to misuse accounting

Read & Download Í PDF, eBook or Kindle ePUB free Ù Howard Schilit

Ize dishonest practicesThe latest tricks companies use to exaggerate revenue and earningsTechniues devised by management to manipulate cash flow as easily as earningsCompanies that use misleading metrics to fool investors about their financial performanceHow companies use acuisitions to hide deterioration in their underlying businessThis new edition focuses on the key case studies and m. Extra one star for the style of presenting the cases and real life situation Accounting gimmicks and ethical business always been my favourite research area and I never found such an interesing book in this area before I think the newest edition will also cover changing situation under IFRS vs GAAP in details


10 thoughts on “Financial Shenanigans How to Detect Accounting Gimmicks Fraud in Financial Reports

  1. says:

    Financial Shenanigans is by Howard Schilit president of the Center for Financial Research and Analysis It is a very readable step by step guide to detecting fraud by reading financial statementsMost of the big cor

  2. says:

    very good and insightful Explained in a very simple wayWith accounting background most of it is common sense but is very good to have the cases layed out and explained

  3. says:

    What makes this book uniue is that there is not a lot of material out there on this topic which is easily relatable to a practicing an

  4. says:

    Read this book for my audit 2 class Really amazing how many sneaky ways companies have of trying to show improved performance No wonder so much fraud is never caught it's got to be hard to find a lot of this stuff Another thing that really surprised me was the number of example companies used in the book other than the big obvious ones There were companies who had gotten in trouble with the SEC for all kinds o

  5. says:

    Extra one star for the style of presenting the cases and real life situation Accounting gimmicks and ethical business alwa

  6. says:

    A solid basic book on what to look for when analyzing the shenanigans of a company It gave me a few good ideas on adjusting my process I woudl recommend to those that are learning to become skeptics of management teams and earnings releases

  7. says:

    best book ive read all year

  8. says:

    Reads like a novel with the content of a textbook

  9. says:

    Greed is as old as mankind Unscrupulous people will try to trick others out of their money One arena for this is the business sector and especially after the IT crash there was a number of high profile accounting scandals Financial

  10. says:

    The best of it's kind a case study approach to forensic accounting similar to What's Behind the Numbers? published by Wiley competitor McGraw Hill Financial Shenanigans has a simple theme there are all kinds of ways to obfuscate business activities when non GAAP accounting practices are reported to the public and many of these tricks center on a range of things from simply allocations of liabilities to profits to sophi

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