Tread lightly through these accounting minefields.

摘要: In the current economic climate, there is tremendous pressure--and personal incentive for managers--to report sales growth and meet investors' revenue expectations. As a result, more companies have been issuing misleading financial reports, according to SEC, especially involving game playing around earnings. But it's shareholders who suffer from aggressive accounting strategies; they don't get true sense of health company, when problems come light, shares they're holding can plummet in value. How investors their representatives on corporate boards spot trouble before it blows up faces? According authors, should keep eyes peeled common abuses six areas: measurement recognition, provisions reserves uncertain future costs, asset valuation, derivatives, related party transactions, information used bench-marking performance. If disaster strikes, will most likely be one these minefields. This article examines hazards each minefield turn, using examples like Metallgesellschaft, Xerox, MicroStrategy, Lernout & Hauspie. It also provides set questions ask order determine where company's practices might overly aggressive. For those whose greatest interest fairly valuing business--not presenting best possible light--these are first line defense against creative accounting. Accounting players adroit, but both foolish dangerous, contend declare oneself ignorant hence powerless machinations. They argue that members need financially literate.