Showing posts with label creative accounting. Show all posts
Showing posts with label creative accounting. Show all posts

Thursday 13 May 2010

Cooking the Books: This is very different from "Creative Accounting."

The vast majority of audited financial statements are prepared fairly.  They are assembled in accordance with GAAP and evidence sound fiscal controls and integrity of management.  However, sometimes this is not the case and financial fraud is committed:  illegal payments made, assets misused, losses concealed, expenses under-reported, revenue over-recorded and so forth.

Cooking the books is very different from "creative accounting."

It is creative to use accounting rules to best present your company in a favourable financial light.  It is legal and accepted.

"Cooking the books" means intentionally hiding or distorting the real financial performance and/or financial condition of a company.  Cooking the books is done for a deceptive purpose and is meant to defraud.


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