|
|
Article: Accounting Shenanigans on the Cash Flow Statement
- Article from:
- The CPA Journal
- Article date:
- March 1, 2006
- Author:
CopyrightCopyright New York State Society of Certified Public Accountants Mar 2006. Provided by ProQuest LLC. (Hide copyright information)
|
Metrics Might Change, but Corporate Behavior Does Not
CPAs typically focus on uncovering items that would impact the reported earnings or the balance sheet of a company. Knowing that investors use the balance sheet and the income statement to make investment decisions, companies sometimes engage in unusual or aggressive accounting practices in order to flatter their reported figures, especially earnings.
In the wake of recent high-profile scandals, the landscape is beginning to change. The majority of investors are now keenly aware of the concept of quality of earnings. It is now fairly common knowledge in the investment community that corporate management can in various ways manipulate ...