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Financial Shenanigans, Fourth Edition: How to Detect Accounting Gimmicks & Fraud in Financial Reports, 4th Edition

Book Description

The bestselling classic from the “Sherlock Holmes of Accounting”—updated to reflect key case studies from the past quarter century and the dishonest tactics used to mislead investors.

This fourth edition of the bestselling guide shines a light on the most shocking frauds and financial reporting offenders, and gives investors the tools they need to spot deceptive financial reporting in the global markets. This unparalleled guide provides the investigative tools you need to detect:

* Corporate cultures that incentivize dishonest practices
* The latest tricks companies use to exaggerate revenue and earnings
* Techniques devised by management to manipulate cash flow as easily as earnings
* Companies that use misleading metrics to fool investors about their financial performance
* How companies use acquisitions to hide deterioration in their underlying business

You’ll learn everything you need to know to unearth deceptive reporting and avoid costly mistakes. This new edition focuses on the key case studies from the past quarter century and brings you up to date on accounting chicanery in the global markets. Howard Schilit and his team of renowned forensic accounting experts reveal the most shocking frauds, expose financial reporting miscreants, and unveil the latest methods companies use to mislead investors.

Table of Contents

  1. Cover
  2. Title Page
  3. Copyright Page
  4. Dedication
  5. Contents
  6. Preface: Reflections on My Last 25 Years
  7. Part One Establishing The Foundation
    1. 1 25 Years of Shenanigans
    2. 2 Just Touch Up the X-Rays
  8. Part Two Earnings Manipulation Shenanigans
    1. 3 Earnings Manipulation Shenanigan No. 1: Recording Revenue Too Soon
    2. 4 Earnings Manipulation Shenanigan No. 2: Recording Bogus Revenue
    3. 5 Earnings Manipulation Shenanigan No. 3: Boosting Income Using One-Time or Unsustainable Activities
    4. 6 Earnings Manipulation Shenanigan No. 4: Shifting Current Expenses to a Later Period
    5. 7 Earnings Manipulation Shenanigan No. 5: Employing Other Techniques to Hide Expenses or Losses
    6. 8 Earnings Manipulation Shenanigan No. 6: Shifting Current Income to a Later Period
    7. 9 Earnings Manipulation Shenanigan No. 7: Shifting Future Expenses to the Current Period
  9. Part Three Cash Flow Shenanigans
    1. 10 Cash Flow Shenanigan No. 1: Shifting Financing Cash Inflows to the Operating Section
    2. 11 Cash Flow Shenanigan No. 2: Moving Operating Cash Outflows to Other Sections
    3. 12 Cash Flow Shenanigan No. 3: Boosting Operating Cash Flow Using Unsustainable Activities
  10. Part Four Key Metric Shenanigans
    1. 13 Key Metric Shenanigan No. 1: Showcasing Misleading Metrics That Overstate Performance
    2. 14 Key Metric Shenanigan No. 2: Distorting Balance Sheet Metrics to Avoid Showing Deterioration
  11. Part Five Acquisition Accounting Shenanigans
    1. 15 Acquisition Accounting Shenanigan No. 1: Artificially Boosting Revenue and Earnings
    2. 16 Acquisition Accounting Shenanigan No. 2: Inflating Reported Cash Flow
    3. 17 Acquisition Accounting Shenanigan No. 3: Manipulating Key Metrics
  12. Part Six Putting It All Together
    1. 18 The Unraveling
    2. 19 The Forensic Mindset
  13. Index
  14. Acknowledgments