How Many Companies Are Cooking the Books?

Discussion in 'Stocks' started by Nobert, Jun 26, 2020.

  1. smallfil

    smallfil

    That is why financial statements of Wall Street companies are audited by accounting firms to make sure all the figures claimed are in fact valid and accurate. Most traders now rely on a much more reliable metric, the stockcharts. Think about it, it represents all the opinions of all the traders and investors in a given stock. They actually, put their monies where their mouths are by investing or trading that stock. That includes the guys that really matter, the big boys (hedge funds, mutual funds, brokers and banks) who trade hundreds of millions or even billions of dollars in any given stock.
     
    #11     Jun 27, 2020
  2. Sig

    Sig

    Yeah, I really don't get the Wirecard style fraud where they just make up cash that doesn't exist. That phantom cash carries forward on the books forever. So the only way to avoid the inevitability of getting caught is to funnel back $2B in legitimate profits over the subsequent years. Which would require cooking the books the other way and showing you less profitable than you are to the tune of $2B, so for a company that size wildly unlikely to happen. You have to wonder WTF they're thinking?
     
    #12     Jun 27, 2020
    ironchef and zdreg like this.
  3. ironchef

    ironchef

    All these faking probably started small. Let's say during one quarter, they missed cash flow goal by 5%, it was easy, to fake a 5% cash gain, thought they could make up during the next quarter. Unfortunately, next quarter they missed by 5% again so you fake another 5%.... pretty soon, the 5% became $2B.

    I think Karen the supertrader made the same error in judgement.
     
    #13     Jun 27, 2020
  4. 931

    931

    is it motivated by bonuses or what they lose by missing?
     
    #14     Jun 28, 2020