The financial numbers game : detecting creative accounting practices

Author(s)

• Mulford, Charles W.
• Comiskey, Eugene E.

Bibliographic Information

The financial numbers game : detecting creative accounting practices

Charles W. Mulford and Eugene E. Comiskey

Wiley, c2002

• : [hbk]
• : pbk

Note

[hbk] : Error in words of the binding on CIP: "0-471-37008-8(pbk. : alk. paper)" as "0-471-37008-8(hbk. : alk. paper)"

Includes bibliographical references and indexes

Pagination of pbk.: xii, 395 p

Description and Table of Contents

Volume

: [hbk] ISBN 9780471370086

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

1. Financial Numbers Game. Rewards of the Game. Classifying Creative Accounting Practices. Plan of This Book. Summary. Glossary. Notes. 2. How the Game Is Played. Accounting Policy Choice and Application. Fraudulent Financial Reporting. Cleaning Up after the Game. Clarifying Terminology. Summary. Glossary. Notes. 3. 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. 4. The SEC Responds. The Chairman's Speech. The Action Plan. Subsequent Developments. Enforcing the Securities Laws. Summary. Glossary. Notes. 5. Financial Professionals Speak Out. Survey of Financial Professionals. Survey Results. Summary. Glossary. Notes. 6. 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. 7. 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. 8. 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. 9. 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. 10. Getting Creative with the Income Statement: Pro-Forma Measures of Earnings. Recasting the Bottom Line: Pro-Forma Earnings Measures. Summary. Glossary. Notes. 11. 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.

Volume

: pbk ISBN 9780471770732

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 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

Table of Contents

1 Financial Numbers Game 1 Rewards of the Game 2 Classifying Creative Accounting Practices 8 Plan of This Book 13 Summary 14 Glossary 15 Notes 16 2 How the Game Is Played 19 Accounting Policy Choice and Application 19 Fraudulent Financial Reporting 39 Cleaning Up after the Game 44 Clarifying Terminology 49 Summary 50 Glossary 50 Notes 52 3 Earnings Management: A Closer Look 57 What Is Earnings Management? 58 Incentives and Conditions for Earnings Management 60 Earnings Management Techniques 62 Evidence of Earnings Management 68 Effectiveness of Earnings Management 74 Is Earnings Management Good or Bad? 82 Summary 84 Glossary 86 Notes 88 4 The SEC Responds 93 The Chairman's Speech 93 The Action Plan 96 Subsequent Developments 99 Enforcing the Securities Laws 108 Summary 120 Glossary 122 Notes 123 5 Financial Professionals Speak Out 127 Survey of Financial Professionals 129 Survey Results 133 Summary 156 Glossary 157 Notes 158 6 Recognizing Premature or Fictitious Revenue 159 Is It Premature or Fictitious Revenue? 160 When Should Revenue Be Recognized? 165 Detecting Premature or Fictitious Revenue 185 Checklist to Detect Premature or Fictitious Revenue 191 Summary 193 Glossary 194 Notes 196 7 Aggressive Capitalization and Extended Amortization Policies 201 Cost Capitalization 202 Detecting Aggressive Cost Capitalization Policies 214 Amortizing Capitalized Costs 220 Detecting Extended Amortization Periods 226 Checklist to Detect Aggressive Capitalization and Extended Amortization Policies 229 Summary 231 Glossary 231 Notes 233 8 Misreported Assets and Liabilities 237 Link with Reported Earnings 238 Boosting Shareholders' Equity 239 Overvalued Assets 240 Undervalued Liabilities 259 Checklist to Detect Misreported Assets and Liabilities 268 Summary 271 Glossary 272 Notes 275 9 Getting Creative with the Income Statement: Classification and Disclosure 279 Current Income Statement Requirements and Practices 280 Reporting Comprehensive Income 292 Creative Income Statement Classifications 295 Creativity with Other Aspects of the Income Statement 304 Summary 311 Glossary 312 Notes 313 10 Getting Creative with the Income Statement: Pro-Forma Measures of Earnings 317 Recasting the Bottom Line: Pro-Forma Earnings Measures 318 Summary 339 Glossary 340 Notes 341 11 Problems with Cash Flow Reporting 345 Reporting Cash Flow 347 Problems with Reported Operating Cash Flow 354 Using Operating Cash Flow to Detect Creative Accounting Practices 370 Checklist for Using Operating Cash Flow to Detect Creative Accounting Practices 373 Summary 373 Glossary 375 Notes 377 Subject Index 379 Company Index 391

by "Nielsen BookData"

Details

• NCID: BA57239574
• ISBN:
  • 0471370088
  • 9780471770732
• LCCN: 2001045648
• Country Code: us
• Title Language Code: eng
• Text Language Code: eng
• Place of Publication: New York
• Pages/Volumes: xi, 395 p.
• Size: 26 cm
• Classification:
  • DC21 : 657.76
• Subject Headings:
  • LCSH : Financial statements
  • LCSH : Stocks -- Prices