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The financial numbers game : detecting creative accounting practices /
Charles W. Mulford and Eugene E. Comiskey.
imprint
New York : Wiley, c2002.
description
xi, 395 p. ; 26 cm.
ISBN
0471370088 (pbk. : alk. paper)
format(s)
Book
Holdings
More Details
added author
imprint
New York : Wiley, c2002.
isbn
0471370088 (pbk. : alk. paper)
catalogue key
4667617
 
Includes bibliographical references and indexes.
A Look Inside
About the Author
Author Affiliation
Charles W. Mulford is Invesco Chair and Professor of Accounting Eugene E. Comiskey is Callaway Chair and Professor of Accounting in the DuPree College of Management at the Georgia Institute of Technology in Atlanta. Both have doctorates in accounting and are professionally qualified as Certified Public Accountants
Excerpts
Flap Copy
To hide falling profits, some managers ply the flexibility found in accounting principles to alter their financial reports. Others go further and use fraud in their deception. It is vitally important that investors, analysts, and other users of financial statements detect these creative accounting practices as early as possible in order to avoid negative earnings surprises and potential share-price declines. The Financial Numbers Game identifies the steps businesses may take to misstate financial performance and helps its readers to identify those situations where reported results may not be what they seem. Authors Mulford and Comiskey also describe the flexibility built into the GAAP principles and discuss ways companies can take advantage of that flexibility while remaining within the rules of proper reporting. The role of the SEC in enforcing securities laws is explored, as are the specific statutes the SEC uses to prosecute those it deems to have gone too far. The authors present the results of a survey of important financial professionals on their views of the propriety of many financial reporting practices and on the steps they use to detect creative accounting practices. This survey shows a wide range of opinions on what is allowable and the best methods for detecting what is not allowable. The Financial Numbers Game presents an expert analysis of creative accounting procedures, as well as: Real-world examples of aggressive and fraudulent financial reports What signs to look for in detecting earnings manipulation Ready-made checklists for detecting accounting misdeeds Advice from such experts as analysts, CFOs, and CPAs Help foranyone interested in understanding true financial performance The Financial Numbers Game offers all users of financial statements a comprehensive resource for understanding, detecting, and avoiding the vast assortment of creative accounting techniques found in practice today.
Full Text Reviews
Appeared in Choice on 2002-06-01:
The reliability and credibility of financial accounting has never been lower. Major causes of this crisis are the flexibility and creativity allowed in the recording and reporting of financial events. Authored by two accounting professors affiliated with the Georgia Institute of Technology, this authoritative and comprehensive book is intended to enable the serious financial statement user to avoid investment and credit-granting mistakes through better detection of aggressive accounting to achieve desirable results and deceptively creative as well as fraudulent financial reporting. Chapters 6 through 11 are particularly important for the detailed recommendations regarding recognition of premature or fictitious revenue, aggressive capitalization and extended amortization policies, misreported assets and liabilities, creativity in the income statement, and problems with cash flow reporting. Strengths of this clearly written work are the hundreds of real-world examples of aggressive and fraudulent reports, advice on signs to look for in detecting earnings manipulation, and numerous ready-made checklists for uncovering accounting misdeeds. The authors' expertise is enhanced by the advice of analysts, CFOs, and CPAs. This important and timely book is an indispensable resource for the serious user of financial information. Graduate, faculty, and practitioner collections. D. C. Daly Metropolitan State University
Reviews
Review Quotes
"The author's purpose is "to equip the financial statement reader to better detect the use of creative accounting practices and avoid the equity-investment and credit-granting mistakes." A book for it's time" ("Strategic Finance," March 2002) "With the collapse of Enron Corp., the January debut of the "Financial Numbers Game" could not have arrived at a more perfect time. The book focuses on educating investors on how to spot "creative accounting Practices." Co-Author Charles W. Mulford outlines a few basic guidelines for detecting-and preventing-creative accounting." ("SmartPros/Accounting News and Insights," March 2002)
"The author's purpose is "to equip the financial statement reader to better detect the use of creative accounting practices and avoid the equity-investment and credit-granting mistakes." A book for it's time" (Strategic Finance, March 2002) "With the collapse of Enron Corp., the January debut of the "Financial Numbers Game" could not have arrived at a more perfect time. The book focuses on educating investors on how to spot "creative accounting Practices." Co-Author Charles W. Mulford outlines a few basic guidelines for detecting-and preventing-creative accounting." (SmartPros/Accounting News and Insights, March 2002)
This item was reviewed in:
Globe & Mail, February 2002
Choice, June 2002
To find out how to look for other reviews, please see our guides to finding book reviews in the Sciences or Social Sciences and Humanities.
Summaries
Bowker Data Service Summary
Some managers use accounting techniques to alter report profits. This book identifies the steps businesses may take to misstate financial performance.
Long Description
Praise for The Financial Numbers Game"So much for the notion ‘those who can, do-those who can't, teach.' Mulford and Comiskey function successfully both as college professors and realworld financial mercenaries. These guys know their balance sheets. The Financial Numbers Game should serve as a survival manual for both serious individual investors and industry pros who study and act upon the interpretation of financial statements. This unique blend of battleearned scholarship and quality writing is a mustread/musthave reference for serious financial statement analysis."--Bob Acker, Editor/Publisher, The Acker Letter"Wall Street's unforgiving attention to quarterly earnings presents ever increasing pressure on CFOs to manage earnings and expectations. The Financial Numbers Game provides a clear explanation of the ways in which management can stretch, bend, and break accounting rules to reach the desired bottom line. This arms the serious investor or financial analyst with the healthy skepticism required to drive beyond reported results to a clear understanding of a firm's true performance."--Mark Hurley, Managing Director, Training and Development,Global Corporate and Investment Banking, Bank of America"After reading The Financial Numbers Game, I feel as though I've taken a master's level course in financial statement analysis. Mulford and Comiskey's latest book should be required reading for anyone who is serious about fundamentally analyzing stocks."--Harry Domash, San Francisco Chronicle investing columnist and investment newsletter publisher
Long Description
Praise for The Financial Numbers Game "So much for the notion those who can, dothose who cant, teach. Mulford and Comiskey function successfully both as college professors and real-world financial mercenaries. These guys know their balance sheets. The Financial Numbers Game should serve as a survival manual for both serious individual investors and industry pros who study and act upon the interpretation of financial statements. This unique blend of battle-earned scholarship and quality writing is a must-read/must-have reference for serious financial statement analysis." --Bob Acker, Editor/Publisher, The Acker Letter "Wall Streets unforgiving attention to quarterly earnings presents ever increasing pressure on CFOs to manage earnings and expectations. The Financial Numbers Game provides a clear explanation of the ways in which management can stretch, bend, and break accounting rules to reach the desired bottom line. This arms the serious investor or financial analyst with the healthy skepticism required to drive beyond reported results to a clear understanding of a firms true performance." --Mark Hurley, Managing Director, Training and Development, Global Corporate and Investment Banking, Bank of America "After reading The Financial Numbers Game, I feel as though Ive taken a masters level course in financial statement analysis. Mulford and Comiskeys latest book should be required reading for anyone who is serious about fundamentally analyzing stocks." --Harry Domash, San Francisco Chronicle investing columnist and investment newsletter publisher
Main Description
"After reading The Financial Numbers Game, I feel as though Ive taken a masters level course in financial statement analysis. Mulford and Comiskeys latest book should be required reading for anyone who is serious about fundamentally analyzing stocks." -- Harry Domash, San Francisco Chronicle investing columnist and investment newsletter publisher
Main Description
Praise for The Financial Numbers Game "So much for the notion 'those who can, do-those who can't, teach.' Mulford and Comiskey function successfully both as college professors and real-world financial mercenaries. These guys know their balance sheets. The Financial Numbers Game should serve as a survival manual for both serious individual investors and industry pros who study and act upon the interpretation of financial statements. This unique blend of battle-earned scholarship and quality writing is a must-read/must-have reference for serious financial statement analysis." -Bob Acker, Editor/Publisher, The Acker Letter "Wall Street's unforgiving attention to quarterly earnings presents ever-increasing pressure on CFOs to manage earnings and expectations. The Financial Numbers Game provides a clear explanation of the ways in which management can stretch, bend, and break accounting rules to reach the desired bottom line. This arms the serious investor or financial analyst with the healthy skepticism required to drive beyond reported results to a clear understanding of a firm's true performance." -Mark Hurley, Managing Director, Training and Development Global Corporate and Investment Banking, Bank of America "After reading The Financial Numbers Game, I feel as though I've taken a master's course in financial statement analysis. Mulford and Comiskey's latest book should be required reading for anyone who is serious about fundamentally analyzing stocks." -Harry Domash, Investing Columnist, San Francisco Chronicle and Publisher, Winning Investing The Financial Numbers Game identifies the steps businesses may take to misstate financial performance and helps its readers to identify those situations where reported results may not be what they seem.
Table of Contents
Financial Numbers Game
Rewards of the Game
Classifying Creative Accounting Practices
Plan of This Book
Summary
Glossary
Notes
How the Game Is Played
Accounting Policy Choice and Application
Fraudulent Financial Reporting
Cleaning Up after the Game
Clarifying Terminology
Summary
Glossary
Notes
Earnings Management: A Closer Look
What Is Earnings Management?
Incentives and Conditions for Earnings Management
Earnings Management Techniques
Evidence of Earnings Management
Effectiveness of Earnings Management
Is Earnings Management Good or Bad?
Summary
Glossary
Notes
The SEC Responds
The Chairman's Speech
The Action Plan
Subsequent Developments
Enforcing the Securities Laws
Summary
Glossary
Notes
Financial Professionals Speak Out
Survey of Financial Professionals
Survey Results
Summary
Glossary
Notes
Recognizing Premature or Fictitious Revenue
Is It Premature or Fictitious Revenue?
When Should Revenue Be Recognized?
Detecting Premature or Fictitious Revenue
Checklist to Detect Premature or Fictitious Revenue
Summary
Glossary
Notes
Aggressive Capitalization and Extended Amortization Policies
Cost Capitalization
Detecting Aggressive Cost Capitalization Policies
Amortizing Capitalized Costs
Detecting Extended Amortization Periods
Checklist to Detect Aggressive Capitalization and Extended Amortization Policies
Summary
Glossary
Notes
Misreported Assets and Liabilities
Link with Reported Earnings
Boosting Shareholders' Equity
Overvalued Assets
Undervalued Liabilities
Checklist to Detect Misreported Assets and Liabilities
Summary
Glossary
Notes
Getting Creative with the Income Statement: Classification and Disclosure
Current Income Statement Requirements and Practices
Reporting Comprehensive Income
Creative Income Statement Classifications
Creativity with Other Aspects of the Income Statement
Summary
Glossary
Notes
Getting Creative with the Income Statement: Pro-Forma Measures of Earnings
Recasting the Bottom Line: Pro-Forma Earnings Measures
Summary
Glossary
Notes
Problems with Cash Flow Reporting
Reporting Cash Flow
Problems with Reported Operating Cash Flow
Using Operating Cash Flow to Detect Creative Accounting Practices
Checklist for Using Operating Cash Flow to Detect Creative Accounting Practices
Summary
Glossary
Notes
Subject Index
Company Index
Table of Contents provided by Publisher. All Rights Reserved.

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