Authors: Jeffrey M. Madura
ISBN-13: 9780071422765, ISBN-10: 0071422765
Format: Paperback
Publisher: McGraw-Hill Companies, The
Date Published: December 2003
Edition: (Non-applicable)
Everything investors who skipped accounting class need to know to spotand steer clear ofcompanies whose numbers don't add up
Individual investors today are painfully aware that accounting fraud is more widespread than ever, yet often they aren't sure what this fraud looks like or even where to look. What Every Investor Needs to Know About Accounting Fraud explains common accounting maneuvers, distortions, and outright deceptions that savvy investors must be able to recognize and steer clear of, all in a concise, easy-to-understand format. Professor Jeff Madura has created a book that is both accessible and informative, and doesn't talk down to the reader. Concise yet complete, it provides investors with:
Ch. 1 | The Accounting Mess | 1 |
Pt. I | How Accounting Can Distort Stock Values | 7 |
Ch. 2 | The Link Between Accounting and Stock Valuation | 8 |
Ch. 3 | Background on Deceptive Accounting | 16 |
Ch. 4 | How Accounting Can be Used to Inflate Revenue | 21 |
Ch. 5 | How Accounting Can Deflate Expenses | 26 |
Ch. 6 | How Accounting Can Inflate Growth | 35 |
Ch. 7 | How Accounting Can Reduce Perceived Risk | 39 |
Ch. 8 | How Accounting Can Contaminate Your Investment Strategies | 43 |
Pt. II | Accounting Controls: Out of Control | 47 |
Ch. 9 | Why Auditing May Not Prevent Deceptive Accounting | 48 |
Ch. 10 | Why Credit Rating Agencies May Not Prevent Deceptive Accounting | 51 |
Ch. 11 | Why Analysts May Not Prevent Deceptive Accounting | 54 |
Pt. III | How Boards of Directors May Prevent Deceptive Accounting | 59 |
Ch. 12 | Board Culture to Serve Shareholders | 60 |
Ch. 13 | Board Mandate to Revise Executive Compensation Structure | 65 |
Ch. 14 | Board Mandate to Report Stock Option Expenses | 71 |
Ch. 15 | Board Efforts to Tame Corporate Executives | 75 |
Pt. IV | How Governance May Prevent Deceptive Accounting | 81 |
Ch. 16 | Governance by the Financial Accounting Standards Board | 82 |
Ch. 17 | Governance by the SEC | 85 |
Ch. 18 | Governance Enforced by the Sarbanes-Oxley Act | 91 |
Ch. 19 | Governance by Stock Exchanges | 98 |
Pt. V | How Investors Can Cope with Deceptive Accounting | 105 |
Ch. 20 | Look beyond Earnings | 106 |
Ch. 21 | Use a Long-Term Perspective | 116 |
Ch. 22 | Don't Trust Anyone | 119 |
Ch. 23 | Invest in Mutual Funds | 124 |
Ch. 24 | Invest in Exchange-Traded Funds | 133 |
Ch. 25 | Invest in Other Securities | 137 |
App. A | Investing in Individual Stocks | 143 |
App. B | The Danger of Initial Public Offerings | 152 |
Index | 157 | |
About the Author | 165 |