Financial Shenanigans (Fourth Edition): How to Detect Accounting Gimmicks & Fraud in Financial Reports

by Howard M. Schilit, Jeremy Perler, Yoni Engelhart

The best-selling classic from the “Sherlock Holmes of Accounting” - updated to reflect the key case studies and most important lessons from the past quarter century.

This fourth edition of the classic guide shines a light on the most shocking frauds and financial reporting offenders of the last 25 years and gives investors the tools they need to

Corporate cultures that incentivize dishonest practicesThe latest tricks companies use to exaggerate revenue and earningsTechniques devised by management to manipulate cash flow as easily as earningsCompanies that use misleading metrics to fool investors about their financial performanceHow companies use acquisitions to hide deterioration in their underlying business This new edition focuses on the key case studies and most important lessons from the past quarter century and brings you up to date on accounting chicanery in the global markets. Howard Schilit and his team of renowned forensic accounting experts expose financial reporting miscreants and unveil the latest methods companies use to mislead investors. You'll learn everything you need to know to unearth deceptive reporting and avoid costly mistakes.

Genres: Finance, Business

Audible Audio

Published July 20, 2021

Reviews

[Ben Betzler · Rating 5 out of 5]

Financial Shenanigans is informative, well-structured, and clearly written for investors evaluating individual companies. While that may describe my future interests (particularly in M&A), I approached the book from the perspective of a branch-level accounting manager seeking to better understand how accounting mechanics can be used — and misused — to influence reported performance.

I would have preferred the book to be even more technical and explicit in distinguishing between standard accounting practices, aggressive but permissible strategies, and outright fraudulent behavior. That said, that simply isn’t the book’s objective.

Side note: it was particularly interesting to read the authors’ perspectives on M&A as a key growth strategy, especially after recently finishing Brad Jacobs’ book and since I work for a company that makes multiple acquisitions each PE cycle.

[Aakash Parikh · Rating 5 out of 5]

Phenomenal book which forces one to imbibe a forensic mindset while evaluating businesses! It’s a very heavy read as it goes deep into accounting. An excellent read if you are into investing or just finished your MBA. It covers not just entire accounting but also key lessons on corporate governance using examples and stories which makes the subject easy to grasp and read.

[Sydni · Rating 2 out of 5]

You’d expect a book chock-full of some of the largest historical frauds to be very entertaining, but this book dragged at points. It’s very technical in the methods that were used to perpetrate fraud, but not the motive, incentive, or pressure behind the fraudsters - which is what makes these sorts of books more interesting. I really do appreciate the financial knowledge gained over deciphering how companies deceive investors, I think that’s useful knowledge for everyone, but it just jumped from example to example explaining which accounts they hid expenses in. I don’t know, just overall not as entertaining as I’d hoped.

[Tom Nicholls · Rating 5 out of 5]

Excellent and highly recommend.
An essential read for anyone touching financial statements.
This book does a brilliant job of laying out exactly how companies bend and circumvent accounting rules to manipulate their financial results.
The authors use real-life case studiesto illustrate the tactics.
I think everyone working in financial services or with regular exposure to corporate accounts should be required to read this. It's truly eye-opening and provides a framework for reading between the lines.