creative accounting
Bending the books
Creative accounting is the manipulation of financial records to present a misleadingly favorable picture while staying technically within legal bounds.
The practice exploits loopholes and ambiguities in accounting rules: The company's impressive profits turned out to be creative accounting.
The term is almost always pejorative, implying deception without outright fraud.
Manipulating financial statements illegally
- window dressingDeceptive surface appeal
- fudgingManipulating facts dishonestly
- doctoringAltering deceptively
- falsificationDeliberate alteration of truth
misrepresentation · embellishment · distortion · fabrication · misstatement · overstatement · understatement · obfuscation
Legal payment minimization
- shelteringProtecting from elements
- shell companiesLegally registered but inactive businesses
- write-offsCancelled debts or expenses
- deductionsConclusions from reasoning
exemptions · gray areas · interpretation · structuring · trusts · tax havens · loopholes
Recording financial transactions systematically
- ledgerFinancial record book
- balance sheetAssets-liabilities-equity report
- revenueBusiness income total
- expensesMoney spent on things
assets · liabilities · equity · cashflow · profit · loss · audit · financial statements
cooking the books
Manipulating financial statements illegally
- window dressingDeceptive surface appeal
- fudgingManipulating facts dishonestly
- doctoringAltering deceptively
falsification · misrepresentation · embellishment · distortion · fabrication · misstatement · overstatement · understatement · obfuscation · misreporting
tax avoidance
Legal payment minimization
- shelteringProtecting from elements
- shell companiesLegally registered but inactive businesses
- write-offsCancelled debts or expenses
deductions · exemptions · gray areas · interpretation · structuring · trusts · tax havens · loopholes
bookkeeping
Recording financial transactions systematically
- ledgerFinancial record book
- balance sheetAssets-liabilities-equity report
- revenueBusiness income total
expenses · assets · liabilities · equity · cashflow · profit · loss · audit · financial statements · journal entries
reclassification
Changing an item's category
- mark-to-marketValuing at current price
- financial crimesbank fraud, wire fraud, securities fraud, tax fraud, insurance fraud
- financial fraudsecurities fraud, bank fraud, defalcation, embezzler, peculation
- Financial ScandalsEnron, Bernie Madoff, Ponzi scheme, insider trading, securities fraud
- tax crimestax fraud, tax evasion, undeclared income, unreported income, hidden income
- bending rulesloopholes, skirting, exploits, workarounds, cutting corners
- corruptioncorruption, graft, kickbacks, bribery, bribes
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