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Creative Accounting |
Also found in: Dictionary/thesaurus, Wikipedia, Hutchinson | 0.02 sec. |
Creative Accounting The practice of recognizing revenue in a way that makes a company look better than it is while still conforming to the GAAP. Creative accounting seeks to inflate stock prices, for example, by selling assets at the end of a year to create a profit that offsets a loss. One could argue that creative accounting hides a company's true financial state, but, unlike aggressive accounting, creative accounting is generally legal. It is also called financial engineering. See also: Sarbanes-Oxley Act of 2002. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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Elsewhere in his book, Shortt delves into such topics as grade inflation with the concurrent trend of dumbing down the curriculum, and how education officials across the country have used creative accounting on their states' test results to continue receiving federal money. OFHEO had set its sights on Fannie Mae after sibling Freddie Mac made headlines in 2003 for engaging in creative accounting practices. Creative accounting practices, such as acceleration of revenue recognition and off-balance sheet debt, are still legal, but auditors view them with wariness. |
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