Creative Accounting: A Guide to Accounting Fairness: A Guide to Accounting Fairness

Author: Ermo
Publisher:
Publish Date: 2005-08-01
Features: This book aims to provide a general perspective on the field of accounting judgment, highlighting the methods by which business managers and accountants manipulate accounting results to achieve specific purposes. Chapter introduces the general concepts of accounting principles and accounting concepts, including the purpose of financial statements and the close connection between the income statement and the balance sheet through accounting procedures. Chapter 2 covers the responsibilities of all parties involved in "true and fair" accounting, as well as the roles and responsibilities of directors, auditors, and accounting professional groups. Chapters 3, 4, and 5 comprehensively introduce methods of manipulating accounting profits through creative accounting, covering traditional profit "smoothing" techniques such as inventory and bad debt reserves, as well as relatively newer and more popular manipulation methods such as sales loading and revenue swaps. Chapters 6 and 7 discuss controversial asset valuation issues, revealing how accounting thinking has shifted from the traditional historical cost to the "fair value" concept, and the potential impact of this change on accounting judgment and financial result manipulation. Chapter 8 focuses on the other side of the balance sheet—liabilities, discussing the hot issue in the aftermath of the Enron scandal—how debt is shifted to "off-balance sheet." Chapter 9 discusses judgment and complexity in "business combinations" accounting, as more companies transform into joint ventures and form strategic alliances, and traditional mergers and acquisitions are on the rise, making this section increasingly important. The final chapter focuses on the state of accounting in the "post-Enron" era and discusses potential future developments. This book is interspersed with many real-life cases of creative accounting, where the older cases are used to illustrate that creative accounting is not a new issue, while most cases were discovered within 12 months after Enron became a headline news. Therefore, creative accounting has once again become a hot topic. This book is suitable for all financial and non-financial managers who want to understand the nature of creative accounting, and is particularly suitable for those responsible for preparing accounting statements and analyzing published accounting statements. It will be helpful to anyone who wants to understand the judgmental aspects of financial measurement and wants to know the potential for profit manipulation. Its comprehensive and practical nature demonstrates to managers the skill and ability of MTP in providing users with advantageous and effective knowledge.