15

Financial Shenanigans

CHAPTER OBJECTIVES

This chapter will help the readers to:

  • Understand the regulatory framework in place to ensure that the financial statements are reliable.
  • Appreciate the accounting areas where managerial discretion is available.
  • Develop familiarity with the common areas of creative accounting.
  • Dissect some of the infamous accounting scams of recent times.
  • Apply techniques to detect financial shenanigans.
  • Appreciate the need for ethics in accounting.
15.1 INTRODUCTION

As discussed in Chapter 1, the accounting information is prepared by the management and used by a large number of stakeholders for taking economic decisions. The end result of the accounting cycle, i.e., the three key financial statements—balance ...

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