Customer Reviews

Hidden Financial Risk: Understanding Off Balance Sheet Accounting

5 star:		(2)
4 star:		(1)
3 star:		(0)
2 star:		(0)
1 star:		(0)

 

 

While experts wring hands and say "mistakes were made," this book gives average investors the "how to" in order to make sense of annual reports and balance sheets. It seems to blow the lid off of the various methods that managers used to hide bad debt and shaking investments. Undoubtly, good for most investors who want to avoid a repeat of Enron. It also offers a pretty explanation of why major accounting and auditing firms can't be trusted. At last, a book that allows investors to keep their investments and earn money--instead of CEOs and corporate executives. Favorite Chapter: How to Hide Debt with Pension Accounting.

An expert describes some the main devices used to distort financial information for public consumption, focusing on those which hide debt. I found it both informative and highly readable. Some background in business accounting is helpful but not necessary for the reader.

This is a book that elevates investors to another level. The author describes how management can hide debt with the equity method, lease accounting, and pension accounting. Looking at the consolidated financial statement is not enough to determine the financial condition of a company. Investors must dig deeper and read the footnotes. This book educates investors about how to read some of these footnotes. Remember what Warren Buffett said:

* Rule No. 1: Never lose money
* Rule No. 2: Never forget rule No 1

This book helps investors do just that. I highly recommend it.

- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market