Enron is kaput. Federal charges are flying. Andersen may not survive the debacle; other companies, like Global Crossing, are watching their executives traipse the halls of Congress, testifying about various aspects of their financial health (and lack thereof).
You have clients to protect. You look for investments on their behalf, and you’d like to make sure that the information you’re looking at in order to make your selections isn’t a cooked set of books. What do you look for?
The Financial Numbers Game: Detecting Creative Accounting Practices by Charles W. Mulford and Eugene E. Comiskey (Wiley, 2002) can help. Explanations of the entries on a financial report–and how those entries can be “adjusted”–abound in this clear and eminently readable book that doesn’t hesitate to call attention to crooked practices.