- Hardcover: 288 pages
- Publisher: Wiley; 1 edition (June 13, 2003)
- Language: English
- ISBN-10: 0471433764
- ISBN-13: 978-0471433767
- Product Dimensions: 7.2 x 1.1 x 10.2 inches
- Shipping Weight: 1.7 pounds (View shipping rates and policies)
- Average Customer Review: 4.4 out of 5 stars See all reviews (4 customer reviews)
- Amazon Best Sellers Rank: #1,653,208 in Books (See Top 100 in Books)
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Hidden Financial Risk: Understanding Off Balance Sheet Accounting 1st Edition
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"Ketz' discussion is fascinating, although all too useful to future scamsters wanting to find out just how those clever guys at Enron did it." (UPI Business and Economics, August 11, 2003)
From the Inside Flap
The parade of catastrophic accounting scandals, chief among them the Enron debacle, has intrigued business and the general public as few corporate scandals ever have. The extraordinary number of people materially affected by these episodes, coupled with the irresistible spectacle of base human greed run wild, guarantees that public attention will not soon recede. Everyone agrees that "mistakes were made." There are two very different responses, however, on what to do about it. Are there simply a few bad apples whose just punishment will bring the financial stars back into alignment? Or are the scandals the product of profound systemic failures, the remedy for which can only be revolutionary reform? Accounting professor and renowned authority, Edward Ketz, emphatically proclaims the latter and offers a comprehensive analysis of how firms bury risk, why nobody stops them, and what to do about it in Hidden Financial Risk: Understanding Off-Balance Sheet Accounting.
In Hidden Financial Risk, Ketz thoroughly and accessibly explains the dubious methods by which firms hide debt and the failings by managers, directors, auditors, regulators, and investors who allowed these methods to poison financial reporting. Ketz places particular emphasis on understanding Special Purpose Entities (SPEs), Enrons preferred method of deception. Among other services, this compelling analysis:
- Identifies the incentives for managers to deceive investors and creditors about the firms financial risk
- Illustrates the equity method, lease accounting, and pension accounting, popular methods of Off-Balance Sheet accounting, and explains how investors can deconstruct them
- Examines the failure of boards of directors, accountants, the FASB, and the SEC to minimize accounting failures
- Discusses what must be done to reduce the number of corporate managers who lie in financial reports
- Shows what individual investors must do to protect their investments in a world filled with accounting and auditing fraud
- Explains how the Sarbanes-Oxley bill will affect financial reporting
Ketz concludes with an illuminating look at Arthur Andersen who, while one of the biggest losers in the accounting scandals, may nevertheless hold the key to the industrys resuscitation. Financial reporting is in critical condition. Edward Ketz supplies a compelling diagnosis, prescription, and vision of its road to recovery in Hidden Financial Risk.
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Top Customer Reviews
* 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