Howard Schilit is founder and chief executive officer of the Financial Shenanigans Detection Group, LLC, which alerts its clients to accounting chicanery.


Discussion

Ric from MO posted over 4 years ago:

I loved this article, it could also be titled "Another way to cook the books". As I see a big push in companies to become more "metric"/"performance" based, these same issues identified in this article will also crop up in internal management metrics


Walter from TX posted over 3 years ago:

A great article filled with examples why one should always "ask the second question." Unfortunately one learns the hard way that all is not as it seems.


Edna from Virginia posted over 3 years ago:

It is very hard to monitor these various companies and try to "interpert" their various devious ways to mask problems. Articles like this really help to keep us alert to various shananigans and not be fooled so easily.


David from NC posted over 3 years ago:

Even GAAP data can be suspicious. I have noticed that the cash flow devoted to working capital changes in many annual reports does not match the data shown on balance sheets. This often shows up as changes of inventories and receivables. As these numbers affect the operating cash flow, I wonder which is correct: the cash flow statement or the balance sheet? The apparent discrepancy casts doubt on the entire report, GAAP and Sarbox not withstanding.


Jerry from AZ posted over 3 years ago:

A wonderful article, very useful information with good examples, thank you


F from OH posted over 2 years ago:

Clearly, it is useful to monitor deviations from accepted standards as a means of detecting impending problems. However, it appears unlikely that the average person, however knowledgable, would be able to detect such deviations unless willing to expend substantial time/effort.

One simple alternate approach: any change should be considered suspect!

One unfortunate implication: financial reporting has returned to wild-west ethics, inspite of all the alledged standards in place. I have to wonder why such deviations from standards are permitted at all. Either you have rules, or you don't!


Kenny G from CA posted over 2 years ago:

This makes me wonder about the financials being reported by Salesforce.com and Concur Technologies. Very cryptic revenue recognition and adjustments.


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