Financial Shenanigans: How to Detect Accounting Gimmicks and...

Features

• Cover Type: Hard Cover with 240 pages
• Published by: McGraw-Hill
• Edition: 2nd Edition March 1, 2002
• Written in: English
• ISBN 10 Number: 0071386262
• ISBN 13 Number: 978-0071386265
• Book Dimensions: 9.3 x 6.3 x 1.3 inches
• Weighs: 1.4 pounds

Barron's, October 2002
"Regulators, outside auditors and investors should all keep a copy handy."

Boyd, Brendan, The Cincinnati Post, 10/11/94
"For a book about accounting, "Financial Shenanigans" is "relatively easy, even fascinating read, liberally laced with reveting anecdotes about wayward companies," says Kiplinger's Personal Finance magazine." --This text refers to an out of print or unavailable edition of this title.

Reader Reviews
Over the past decade, Howard Schilit has built a reputation as a financial statement bloodhound through his organization, Center for Financial Research and Analysis (CFRA). His focus is on rooting out elements of public company financial reports that lessen the quality of reported earnings. Financial Shenanigans was originally published in 1993 and much of the discussion in that book is reprinted in the current edition (with more contemporary examples to support the concepts presented). Some may accuse Schilit of glossing over the details of the specific situations and companies used to illustrate his concepts. However, that is the hidden beauty of the book. Peeling back the layers of the financials to uncover fundamental weakness before it hits the stock is not a simple task. I think Schilit does an admirable job of keeping the discussion focused and relevant, without losing the reader in too many details that aren't germane to the topic at hand. Primary topics discussed center around three areas: "aggressive" accounting (recognizing revenue too soon or delaying recognition of expenses), "conservative" accounting (delaying revenue recognition or front-loading expenses), and other misleading elements of financial statements (nonoperating items, misleading disclosure of liabilities). After a clearly worded explanation of the concept, Schilit then illustrates each breach of reporting with real-world examples. He also provides a useful (but certainly not comprehensive) tutorial at the back which explains very basic accounting concepts - I would read it first and then tackle the main chapters. I think this book is most appropriate for investors who manage their own portfolios and spend serious time investing in (or shorting) stocks. It is not for those whose primary investment vehicles are 401(k) accounts or mutual funds and who casually buy a stock or two just to keep life interesting. Shenanigans is a good next step to investing in stocks after you have worked through the basic principles espoused in texts such as Peter Lynch's "One Up on Wall Street" or one of the Buffett books. As an investment professional, I can attest to the validity of the tools taught in this book, and I wholeheartedly recommend it to those investors who are serious about building - and protecting - their investments in the stock market.