Howard Schilit, Jeremy Perler, and Yoni Engelhart subdivide their comprehensive examination of financial shenanigans into four parts:
1. Earnings manipulation shenanigans;
2. Cash flow shenanigans (an eye-opener);
3. Key metrics shenanigans;
4. Acquisition accounting shenanigans.
To their credit, the authors clearly demonstrate that financial shenanigans are much more widespread that a casual observer of the corporate world would believe. Unfortunately, financial shenanigans are not limited to infamous bad apples such as Enron, Lehman Brothers, Tyco, Valeant Pharmaceuticals, and WorldCom, to name a few. The management teams of well-known companies such as Dell Computer, GE, Home Depot, Li & Fung, Netflix, Softbank, and Thomson Reuters have also succumbed to the temptation of embellishing their financial performance at the expense of their investors.
The overall message of Messrs. Schilit, Perler, and Engelhart is that investors should assume that the urge to exaggerate the positive and hide the negative will never disappear. And where temptation exists, shenanigans often follow.
For these reasons, investors are strongly encouraged to apply the ten tenets of the forensic mindset to detect accounting gimmicks and fraud in financial statements.
In summary, the book under review is a must read for anyone investing in individual securities.
- Hardcover: 336 pages
- Publisher: McGraw-Hill Education; 4 ed edition (28 March 2018)
- Language: English
- ISBN-10: 126011726X
- ISBN-13: 978-1260117264
- Product Dimensions: 15.9 x 2.5 x 23.5 cm
- Boxed-product Weight: 567 g
- Average Customer Review: Be the first to review this item
- Amazon Bestsellers Rank: 19,193 in Books (See Top 100 in Books)