Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports, Third Edition: Edition 3

Howard M. Schilit · Jeremy Perler

May 2010 · McGraw Hill Professional

About this ebook

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 readingfor market participants seeking to identify deceptive behavior in company financial statements.”Julian Robertson, legendary investor and founder, Tiger Management

“A must-read! The authors teach forensic financial statement analysis in an easy-to-digest format withlots of war stories. Guaranteed to help investors in their questto avoid ticking time bombs in their portfolios.”
Marc A. Siegel, board member, Financial Accounting Standards Board

“This is a timeless guide to better understand how financial malfeasance can be spotted early.Financial Shenanigans teaches all of us fraud-detection-made-easy.”
Jules Kroll, pioneering private investigator and founder of Kroll Associates and K2 Global

“Required reading for every investor who desires to avoid financial losses.This new edition is a classic and better than ever.”
Thornton L. O’glove, author, Quality of Earnings

“If the original Financial Shenanigans was the Bible of detecting accounting frauds, then this latestversion is the Talmud of cooked books. Regulators, audit committee members, and business journalistsshould be required to read this work if they are involved in public companies.”
Boris Feldman, partner, Wilson Sonsini Goodrich & Rosati, Palo Alto

“An incisive and entertaining review of the recipes used by corporations and executives to ‘cook thebooks.’ It’s a must-read for investors, lawyers, corporate directors, and anyone else interested in theintegrity of the accounting and governance process.”
Joseph A. Grundfest, professor of law and business and codirector,Rock Center on Corporate Governance, Stanford Law School

About the Book:

With major financial scandals poppingup in greater numbers—and with moreinevitably on the way—it has never been moreimportant for you to understand what dishonestcompanies do to trick investors.Since the early 1990s, Financial Shenaniganshas been helping investors unearth deceptivefinancial reporting at the most critical time—before they suffer major losses.

Now, the thirdedition broadens its focus to include the newest,most sophisticated techniques companiesuse to mislead investors.

Referred to as the “Sherlock Holmes ofAccounting” by BusinessWeek, Howard Schilitand renowned forensic accounting expertJeremy Perler take you deeper into the corporatebag of tricks, exposing new levels ofaccounting gimmickry and arming you withthe investigative tools you need to detect:

• Earnings Manipulation Shenanigans: Learnthe latest tricks companies use to exaggeraterevenue and earnings.
• Cash Flow Shenanigans: Discover new techniquesdevised by management that allow it tomanipulate cash flow as easily as earnings.
• Key Metrics Shenanigans: See how companiesuse misleading “key”metrics to fool investorsabout their financial performance.

Financial Shenanigans brings you completelyup to date on accounting chicanery in the globalmarkets, shining a light on the most shockingfrauds and financial reporting miscreants.This insightful, detailed guide written by recognizedexperts on the subject provides theknowledge and tools you need to spot even themost subtle signs of financial shenanigans.

Ratings and reviews

Well written with a good structure and case studies were useful in really understanding the financial shenanigans. However, I think certain aspects should not be considered financial shenanigans such as improvement in working capital which the authors think is a bad think / don't believe it represents the business.

our professor required this book and said we should keep a copy of it. very detailed, helpful description for revenue and expenses, statement of CF, need more on B/S and cash.

Awesome read! Very informative,insightful and interesting.

About the author

Howard Schilit, Ph.D., CPA, is the founderand chief executive officer of the FinancialShenanigans Detection (FSD) Group, LLC. Dr. Schilit is a pioneer in the field of detecting accounting tricks in corporate financial reports that mislead investors. He is the author of Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports, now in its 3rd Edition. Howard was the founder and CEO of CFRA, a global forensic accounting research organization. He has been a leading spokesman before the US Congress, the SEC, and global media outlets about the causes and early warning signs of accounting tricks in public filings. Dr. Schilit began his career as an Associate Professor of Accounting at American University and continues to teach and lecture all over the world. Dr. Schilit holds his doctorate in Accounting from the University of Maryland.
Jeremy Perler, CFA, CPA, is the Director of Research at Schilit Forensics and co-author of FinancialShenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports (3rd edition, 2010). Previously, Jeremy served as the in-house Forensic Accounting Analyst for CoatueManagement, a long/short equity hedge fund; Director of Research for CFRA; and auditor for PricewaterhouseCoopers. In addition, Mr. Perler serves on the FASB's Financial Accounting Standards Advisory Council (FASAC) as a representative of the Investor Community. Jeremy holds a Master of Accounting and a BBA from the University of Michigan Ross School of Business.