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Today’s Topics

Learn how to identify cash flow shenanigans like shifting financing inflows, inflating operating inflows, and more. Understand metrics shenanigans including misleading and distorting metrics. Boost your forensic accounting skills in BA124 course.

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Today’s Topics

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  1. Today’s Topics • Cash Flow Shenanigans • Metrics Shenanigans FORENSIC ACCOUNTING - BA124 - 2013

  2. Cash Flow Shenanigans CFS #1: Shifting Financing inflows to Operating inflows CFS #2: Shifting Operating outflows to Investing outflows CFS #3: “Inflating” Operating inflows through normal but infrequent ops CFS #4: “Inflating” Operating inflows through normal operations FORENSIC ACCOUNTING - BA124 - 2013

  3. CFS #1 Bank borrowings as CFO Sale of receivables as CFO Sham sale of receivables as CFO FORENSIC ACCOUNTING - BA124 - 2013

  4. CFS #2 Boomerang transactions Capitalization of operating expenses Treating inventory purchases as investing activities FORENSIC ACCOUNTING - BA124 - 2013

  5. CFS #3 Inheriting cash flows via acquisition Acquisition of customers or products Structuring a divestiture to benefit operating cash flows FORENSIC ACCOUNTING - BA124 - 2013

  6. CFS #4 Paying vendors more slowly Collecting from customers more quickly Purchasing less inventory Limited disclosure of one-time benefits FORENSIC ACCOUNTING - BA124 - 2013

  7. Metrics Shenanigans MS #1: Misleading metrics that overstate performance MS #2: Distorting metrics that avoid bad news FORENSIC ACCOUNTING - BA124 - 2013

  8. MS #1 Proforma revenue metrics Proforma earnings metrics Proforma cash flow metrics FORENSIC ACCOUNTING - BA124 - 2013

  9. MS #2 Distorting A/R metrics Distorting inventory metrics Distorting financial asset metrics Distorting debt metrics FORENSIC ACCOUNTING - BA124 - 2013

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