Below relates to other articles written by the same author pertaining to fraud & creative accounting.
You might question the reason for the presence of this fraud & creative accounting section.The answer is simple:one of the main reason for the erosion of shareholder value is the overzealous attitude of top management who are rewarded by the Board with big fat incentives to generate high accounting earnings. These over-aggressive managers turn to accounting gimmicks/tricks to generate high accounting earnings growth. We should always learn from the past lessons from Enron, WorldCom, Permalat and many other giants which have collapsed.
So, here it is – some of the following commonly Creative Accounting Gimmicks!
1 -Manipulating Sales and Accounts Receivables
Interesting articles to read:
(a) Example of Revenue Swaps & Violation Of Cut Off Period
(b) article regarding the trick in using revenue recognition to artificially inflate sales figures with the main objective of bloating the bottom line
2 -Manipulating Stocks and Cost of goods
3 -Understating liabilities expense
