Financial Shenanigans: How to Detect Accounting Gimmicks and Fraud Review

October 15th, 2008, Posted in Accounting Books

The title of the book is explicit enough for a person to know what this book is all about. It is a book exposing the fraudulent activities of people involved in financial accounting and business management. There are shenanigans that are not in direct contravention of the law and there are shenanigans that are illegal per se. Illegal or not, it is important that kinds of activities are not permissible to ethical principles and it can incur you civil liabilities.
A company declaring a false financial statement by overstating their income or understating it is a fraudulent practice that should not be followed.  They should be pay for their actions.  The book exposes the shenanigans or gimmicks utilized by other companies that are in cahoots with accountants who tolerate this kind of practice.  The book exposes the gimmicks used by these accountants to flex or devise a way on how to bend financial statements in their record.
The book revealed that these things really do happen.  That saddens me knowing that fact.  What they are doing is tantamount to tax evasion.  It puts a stint to companies who are truthful and do not devise ways to deceive the public.  The book reveals the various methods devised by these companies to make an illusion that they have under recoveries when in fact they do not.  Other companies also use this kind of gimmick to show a mirage to the public that they are doing better when they actually are not.  These would entice investments to the company that is already close to bankruptcy.  The example of which is ENRON.  I am certain that most of you remembered that day when authorities found out that they are already bankrupt.
It also gives the reason why accountants permit or allow this kind of practice.  The reason being they want to retain their clients.  It is a source of income after all.  Accountants just try looking away or not see anything afterwards.  Ethics are of no value to this kind of job.  The most important is profit gained from deception.  Maybe the incentive they get from doing it is too much temptation to refuse.  These kinds of people really put a bad name into good working and honest accountants.  Trust me there is a lot of them but what makes the news is those who do these kinds of acts.  Giving an impression that accountants are people who is trained for deception.

The book can be a reference in the future in case of tax evasion and misrepresenting financial statements.  This will serve as a warning to those who want to use gimmickry in order to mislead the public and the government.  Now that it is out in the open.  Companies would think twice before doing these kinds of things because their secret is now known to the public.  However, there are still some companies who practice this kind of method.  These companies are not giving what is due to the government and the public.  The taxes they pay are just minimal considering they understate their income.  Stock investors are also misled into investing into their company which is going downhill.