DK Essential Managers: Understanding Accounts

Recognizing Creative Accounting

An accountant is expected to present a company’s figures in the best possible light, while being accurate and truthful at all times. Learn to recognize when the figures are being manipulated, since this is a sure sign of creative accounting at work.

Recognize that one person’s smoothing is another’s creative accounting.

Check if creative accounting is increasing or suppressing profits.

Why hide the truth?

Every organization has its own agenda for creative accounting: the larger company wants to report bigger ...