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Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports
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Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports

4.13  ·  Rating Details ·  910 Ratings  ·  39 Reviews
From the " Sherlock Holmes of Accounting," the tools you need to stay a step ahead of the crooks

"Howard Schilit is the authority on forensic accounting. Financial Shenanigans is invaluable reading for market participants seeking to identify deceptive behavior in company financial statements." Julian Robertson, legendary investor and founder, Tiger Management

"A must-read! T
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ebook, Third Edition, 304 pages
Published May 6th 2010 by McGraw-Hill Education (first published February 1st 1993)
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Robert W
Financial Shenanigans is by Howard Schilit, president of the Center for Financial Research and Analysis. It is a very readable step-by-step guide to detecting fraud by reading financial statements.

Most of the big corporate scandals in the past few years have been in one way or another accounting scandals. Either accounting was the primary method of committing fraud, or else accounting was used to cover up other malfeasance. Schilit identifies seven "shenanigans" and the ways they are typically p
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UPWAN
Jan 23, 2017 UPWAN rated it it was amazing  ·  review of another edition
Spot the dodge! Great read !
L.
Read this book for my audit 2 class. Really amazing how many sneaky ways companies have of trying to show improved performance. No wonder so much fraud is never caught - it's got to be hard to find a lot of this stuff! Another thing that really surprised me was the number of example companies used in the book (other than the big obvious ones). There were companies who had gotten in trouble with the SEC for all kinds of things that I hadn't even heard about. No wonder everyone always talks about ...more
Gabriel Pinkus
Real-life examples of financial fraud as seen through financial statements. I would warn readers about taking an assumption that because a company's inventory levels, for example, have increased as a percentage of sales that the company is necessarily concealing fraud. This is a book more about yellow flags in financial statements (a non-zero probability of something odd going on) rather than certain fraud detection. I think what's learned in this book must be seen through the eyes of probabilit ...more
Max Lapin
Jan 27, 2017 Max Lapin rated it it was amazing  ·  review of another edition
Amazing CFO/auditor/investor book written in detective style. Who said accounting is boring. This is definitely the best thing I have seen on bookkeeping and reporting in a decade. Must must must read.
Tom
Dec 22, 2016 Tom rated it really liked it  ·  review of another edition
Reads like a novel with the content of a textbook.
Maxim
Jun 19, 2014 Maxim rated it it was amazing  ·  review of another edition
A must read for financial analysts and investors. I found this book useful even as I read it after completing my CFA.
The author describes most common accounting tricks management may use to manipulate fin reportings, he names signs of a possible accounting fraud as "red flags". The book is full of recent real life examples, some humour also presents. There is a usefull summary of all technics in the book's end.
Main lessons I learned from the book are:
1) you should always be sceptiacal about an
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Marcelo Bahia
Jan 28, 2012 Marcelo Bahia rated it it was amazing  ·  review of another edition
Shelves: investing
An excellent book. The author goes on a step-by-step investigation of a wide array of possible accounting manipulations by fraudulent or ill-intentioned companies. After reading it, you'll learn to be healthily skeptical of quarterly results and conference calls.

For me, an interesting lesson to be taken out of this book is how it's so easy for management to trick investors in a given quarter if they're willing to do so, even if you've read this book before - oh boy, accounting can be so easily m
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Clement Ting
May 24, 2015 Clement Ting rated it really liked it  ·  review of another edition
Pros:
- Demonstrated various ways on how people do their financial gimmicks to look good even at bad times.
- Explanation is easy to grasp.
- Highly creative and mind blowing!
- Various real life examples to help relate to real world situations, even in companies that you thought were clean.

Cons:
- Too judgemental and unforgiving in some cases. Disagree with some "finger pointing" during the case study.
- Too whiny to the point of annoyance. Various "blind man can also see methods" can be done withou
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Brian Zheng
Oct 16, 2011 Brian Zheng rated it it was amazing  ·  review of another edition
Fantastic Book about all the shenanigans/tricks the management can play to manipulate the financial report. It showed how important it is for the term "quality of earning", when management simply has too much operational flexibility to manage the earning, and manipulate almost every single entry of the financial report. Reading all the details of the financial report especially the footnotes become essential to dig all the shenanigans they are playing to have a good view of what the real earning ...more
Tirath
Apr 08, 2013 Tirath rated it it was amazing  ·  review of another edition
Absolutely fantastic book on some of the coolest shenanigans in the recent past.
Oddly, the author has also made a few passing remarks about the Satyam fraud. A massive Indian fraud in a quite well-known global company which many authors have chosen to ignore.
A must-read for people who like detailed analyses of companies/ financials.
And yes, a very easy read for people who understand financial statements.

- A good go-back-to
Vonetta
Nov 25, 2013 Vonetta rated it really liked it  ·  review of another edition
I'm sort of amazed at how many ways there are to commit accounting fraud. I took a class in business school called "Analyzing Earnings Quality" that only tapped the surface of some of these issues. This book, oddly enough, is both repetitive and extensive at the same time. It's basically a 300-page list of things for equity analysts and investors to look for. To that end, it's overwhelming. But on the other foot, it's incredibly useful.
Joseph
Feb 18, 2013 Joseph rated it really liked it  ·  review of another edition
The book is easy to follow. And it always has some preview for the chapters ahead. Still it took me a while to finish it because I m personally not that interested in detecting financial shenanigans or accounting gimmicks.

However, to those who would like to further explore this topic, this book is a definite read.
Papal Bull
Jul 09, 2011 Papal Bull rated it liked it  ·  review of another edition
Shelves: financial
A must read if you want to start investing in public companies. It has a nice cheat sheet when you look at financial statements. However, hindsight is 20/20 and looking back the shenanigans are fairly obvious. If the shenanigans were so obvious everyone would have abandoned Enron and Coleman years earlier.
May
Jun 13, 2011 May rated it really liked it  ·  review of another edition
Shelves: finance
A solid basic book on what to look for when analyzing the shenanigans of a company. It gave me a few good ideas on adjusting my process. I woudl recommend to those that are learning to become skeptics of management teams and earnings releases.
Benjamin
Jun 09, 2011 Benjamin rated it it was amazing  ·  review of another edition
This book provides an extensive case study of various accounting shenanigans that corporations have used. It's organized by category and provides many detailed examples of each kind of accounting "creativity".
Richard Knecht
Needs better organization

Good book, learned a lot. Can use better organization, the author jumps around a bit, and the books, chapters, and sub chapters are hard to follow at times.
Camilla
Apr 08, 2009 Camilla rated it really liked it  ·  review of another edition
Shelves: finance
This was one of the best books I've had to read for class (which is good, because it's required reading again next semester). I don't think it would be very useful to anyone who isn't an auditor or investor.
Jimyip
Jul 01, 2012 Jimyip rated it really liked it  ·  review of another edition
The shenanigans are properly explained with numerous REAL examples. This approach makes understanding much easier than many other financial analysis textbooks which focuses merely on technical details
David
May 05, 2012 David rated it really liked it  ·  review of another edition
interesting read on identifying 7 sets of financial/accounting scams practiced by many companies nowadays..
Good 3 day read..
Vipin Pandey
Sep 23, 2015 Vipin Pandey rated it it was amazing  ·  review of another edition
I wish I could give this more than a 5 star rating. The book covers numerous ways co.s and CEOs try to deceive the investors with incorrect Financial Reporting.
AC
Jul 29, 2009 AC rated it it was amazing  ·  review of another edition
Shelves: markets
Another classic -- for those who remember the quip (I first heard about it via Abe Brillof) that GAAP should be renamed: Commonly Reported Accounting Principles
Chatfield
Mar 14, 2008 Chatfield rated it really liked it  ·  review of another edition
This is fairly easy to read and interesting in what to look for in companies financial statements that may indicate some funny accounting going on.
Rohit Chavan
This is one of the finest book written on financial jugglery. This requires multiple reading to digest down and to make the critical points checklist a second nature.
Elaine
Feb 12, 2013 Elaine marked it as to-read  ·  review of another edition
A how-to manual for manipulating revenues, expenses, and cash flow. This book describes common - and fradulent - schemes to increase earnings and cash.

This book is in the library.
Yeap Naw
Wow--- public traded companies have an arsenal of portraying they are good companies--- must read for investors
Lianna
Apr 05, 2012 Lianna rated it liked it  ·  review of another edition
Shelves: quit
YES!


Update - lost interest and sold it back to amazon. Would have made a really good pamphlet.
Ming
Jan 28, 2009 Ming rated it really liked it  ·  review of another edition
quite possibly the best book on what perspectives to take in reading financial statements. Oh the games bad managers play...
Paul Perry
Paul Perry rated it liked it
Oct 05, 2016
Paramjit
Paramjit rated it liked it
Mar 04, 2016
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