Window dressing (Global) - Revision history

Admin at 15:41, 29 September 2019

2019-09-29T15:41:48Z

← Older revision		Revision as of 15:41, 29 September 2019
Line 8:		Line 8:
	[[:Category:Market\|Market]] – [[:Category: Functional ambivalence\| Functional ambivalence]] – [[:Category: Gaming the system\| Gaming the system]] – [[:Category: Camouflage\| Camouflage]] – [[:Category: Creating facades\| Creating facades]]		[[:Category:Market\|Market]] – [[:Category: Functional ambivalence\| Functional ambivalence]] – [[:Category: Gaming the system\| Gaming the system]] – [[:Category: Camouflage\| Camouflage]] – [[:Category: Creating facades\| Creating facades]]
	\| categories =		\| categories =
	[[:Category:Global\|Global]] – [[:Category: Corporate informality\| Corporate informality]] – [[:Category: Accounting\| Accounting]] – [[:Category: Tax-avoidance\| Tax-avoidance]]		[[:Category:Global\|Global]] – [[:Category: Corporate informality\| Corporate informality]] – [[:Category: Accounting\| Accounting]] – [[:Category: Tax avoidance\| Tax avoidance]]
	\| authorofpiece =David Leung		\| authorofpiece =David Leung
	\| authorinstitution =Queen Margaret Business School, Queen Margaret University, UK		\| authorinstitution =Queen Margaret Business School, Queen Margaret University, UK
Line 21:		Line 21:
	[[Category: Corporate informality]]		[[Category: Corporate informality]]
	[[Category: Accounting]]		[[Category: Accounting]]
	[[Category: Tax-avoidance]]		[[Category: Tax avoidance]]
	[[Category:Entry]]		[[Category:Entry]]
	[[Category: Volume 2]]		[[Category: Volume 2]]

Admin at 13:50, 23 May 2019

2019-05-23T13:50:14Z

← Older revision		Revision as of 13:50, 23 May 2019
Line 51:		Line 51:
	As the 2008 banking crisis showed, however, such regulatory measures have had little or no impact on window dressing. As Arthur Levitt (1998<ref>Levitt, A. 1998. The Numbers Game, Speech at the New York University Center for Law and Business, New York, 28 September.</ref>) observed during his tenure as Chairman of the US Securities and Exchange Commission, the culture of the financial community and the structure of the capitalist system seem to ''demand'' that all listed corporations engage in earnings management. Participants in this market play a self-serving game of ‘nods and winks’: as used-car salesmen spin stories to sell vehicles, corporate accountants concoct ‘bullshit’ to satisfy the needs of investors and analysts (Macintosh 2006<ref>Macintosh, N. 2006. ‘Commentary: The FASB and Accounting for Economic Reality; Accounting – Truth, Lies, or “Bullshit”? A Philosophical Investigation,’ Accounting and the Public Interest, 6: 22-36.</ref>, 2009<ref>Macintosh, N. 2009. ‘Accounting and the Truth of Earnings Reports: Philosophical Considerations,’ European Accounting Review, 18(1): 141-175.</ref>) while auditors, who have long deserted their duties (House of Lords 2011<ref>House of Lords Select Committee on Economic Affairs. 2011. Auditors: Market concentration and their role. London: The Stationery Office.</ref>), continue to be ‘lick-arses’ for corporate management (Sikka 2009<ref>Sikka, P. 2009. ‘Financial crisis and the silence of the auditors,’ Accounting, Organizations and Society, 34: 868-873.</ref>).		As the 2008 banking crisis showed, however, such regulatory measures have had little or no impact on window dressing. As Arthur Levitt (1998<ref>Levitt, A. 1998. The Numbers Game, Speech at the New York University Center for Law and Business, New York, 28 September.</ref>) observed during his tenure as Chairman of the US Securities and Exchange Commission, the culture of the financial community and the structure of the capitalist system seem to ''demand'' that all listed corporations engage in earnings management. Participants in this market play a self-serving game of ‘nods and winks’: as used-car salesmen spin stories to sell vehicles, corporate accountants concoct ‘bullshit’ to satisfy the needs of investors and analysts (Macintosh 2006<ref>Macintosh, N. 2006. ‘Commentary: The FASB and Accounting for Economic Reality; Accounting – Truth, Lies, or “Bullshit”? A Philosophical Investigation,’ Accounting and the Public Interest, 6: 22-36.</ref>, 2009<ref>Macintosh, N. 2009. ‘Accounting and the Truth of Earnings Reports: Philosophical Considerations,’ European Accounting Review, 18(1): 141-175.</ref>) while auditors, who have long deserted their duties (House of Lords 2011<ref>House of Lords Select Committee on Economic Affairs. 2011. Auditors: Market concentration and their role. London: The Stationery Office.</ref>), continue to be ‘lick-arses’ for corporate management (Sikka 2009<ref>Sikka, P. 2009. ‘Financial crisis and the silence of the auditors,’ Accounting, Organizations and Society, 34: 868-873.</ref>).

	==References ~~and Bibliography~~==		==References==
			<references />

			==Further reading==
	# Berenson, A. 2003. The Number: How America’s Balance Sheet Lies Rocked the World’s Financial Markets. London: Pocket Books		# Berenson, A. 2003. The Number: How America’s Balance Sheet Lies Rocked the World’s Financial Markets. London: Pocket Books
	# Chryssides, G. and Kaler, J. (eds). 1993. An Introduction to Business Ethics, Chapter 7. London: Chapman & Hall		# Chryssides, G. and Kaler, J. (eds). 1993. An Introduction to Business Ethics, Chapter 7. London: Chapman & Hall
	# MacKenzie, D. 2003. ‘A philosophical investigation into Enron’, London Review of Books, 26 May, http://www.theguardian.com/books/2003/may/26/londonreviewofbooks1		# MacKenzie, D. 2003. ‘A philosophical investigation into Enron’, London Review of Books, 26 May, http://www.theguardian.com/books/2003/may/26/londonreviewofbooks1
	# Smith, T. 1992. Accounting for Growth: Stripping the Camouflage from Company Accounts. London: Century Business		# Smith, T. 1992. Accounting for Growth: Stripping the Camouflage from Company Accounts. London: Century Business

	~~==References==~~
	~~<references />~~

Editor2018 at 20:58, 17 May 2019

2019-05-17T20:58:02Z

← Older revision		Revision as of 20:58, 17 May 2019
Line 26:		Line 26:
	{\| class="wikitable"		{\| class="wikitable"
	\|-		\|-
	\|style="font-size:1.1em;"\| ~~‘Window dressing’~~ describes a pretence or a façade, a showy misrepresentation of an idea or policy in an attempt to disguise an undesirable reality.		\|style="font-size:1.1em;"\| ''Window dressing'' describes a pretence or a façade, a showy misrepresentation of an idea or policy in an attempt to disguise an undesirable reality.

	The term is derived from the retail sector, where it means decorating a shop window with goods and trimmings in order to attract customers. In the financial sector, it denotes the deliberately misleading manipulation of a company’s income statement and balance sheet in order to create a falsely attractive image and thereby conceal poor performance or monetary losses; it may also refer to an excessively negative presentation of such figures. In the financial context, ‘window dressing’ is synonymous with ‘cooking the books,’ ‘creative accounting,’ ‘Enronomics’ (a reference to the accounting fraud carried out by US energy giant Enron, bankrupted in 2001), and the more euphemistic ‘earnings management,’ which is used by accounting regulators and the academic community.		The term is derived from the retail sector, where it means decorating a shop window with goods and trimmings in order to attract customers. In the financial sector, it denotes the deliberately misleading manipulation of a company’s income statement and balance sheet in order to create a falsely attractive image and thereby conceal poor performance or monetary losses; it may also refer to an excessively negative presentation of such figures. In the financial context, ‘window dressing’ is synonymous with ‘cooking the books,’ ‘creative accounting,’ ‘Enronomics’ (a reference to the accounting fraud carried out by US energy giant Enron, bankrupted in 2001), and the more euphemistic ‘earnings management,’ which is used by accounting regulators and the academic community.

Editor2018 at 14:59, 17 May 2019

2019-05-17T14:59:36Z

← Older revision		Revision as of 14:59, 17 May 2019
Line 1:		Line 1:
	{{infobox		{{infobox
	\| nameofpractice = Window dressing		\| nameofpractice =Window dressing
	\| location = ~~Worldwide~~		\| flagemoji = 🌍
	\| imagemap = World map.png		\| definition =Deliberately misleading manipulation of a company’s income statement and balance sheet in order to create a falsely attractive image and thereby conceal poor performance or monetary losses
	\| authorofpiece = David Leung		\| location =Global
	\| authorinstitution = ~~Coventry~~ University		\| imagemap =World map.png
	}}		\| clusters =
			[[:Category:Market\|Market]] – [[:Category: Functional ambivalence\| Functional ambivalence]] – [[:Category: Gaming the system\| Gaming the system]] – [[:Category: Camouflage\| Camouflage]] – [[:Category: Creating facades\| Creating facades]]
			\| categories =
			[[:Category:Global\|Global]] – [[:Category: Corporate informality\| Corporate informality]] – [[:Category: Accounting\| Accounting]] – [[:Category: Tax-avoidance\| Tax-avoidance]]
			\| authorofpiece =David Leung
			\| authorinstitution =Queen Margaret Business School, Queen Margaret University, UK
			\| authorwebsite =[https://www.qmu.ac.uk/schools-and-divisions/business-school/business-school-staff/dr-david-leung/ Profile page at QMU]}}
			<big>'''By David Leung, Queen Margaret Business School, Queen Margaret University, UK'''</big>
			[[Category:Market]]
			[[Category: Functional ambivalence]]
			[[Category: Gaming the system]]
			[[Category: Camouflage]]
			[[Category: Creating facades]]
			[[Category:Global]]
			[[Category: Corporate informality]]
			[[Category: Accounting]]
			[[Category: Tax-avoidance]]
			[[Category:Entry]]
			[[Category: Volume 2]]
			{\| class="wikitable"
			\|-
			\|style="font-size:1.1em;"\| ‘Window dressing’ describes a pretence or a façade, a showy misrepresentation of an idea or policy in an attempt to disguise an undesirable reality.

	~~'''''Original text by David Leung'''''~~		The term is derived from the retail sector, where it means decorating a shop window with goods and trimmings in order to attract customers. In the financial sector, it denotes the deliberately misleading manipulation of a company’s income statement and balance sheet in order to create a falsely attractive image and thereby conceal poor performance or monetary losses; it may also refer to an excessively negative presentation of such figures. In the financial context, ‘window dressing’ is synonymous with ‘cooking the books,’ ‘creative accounting,’ ‘Enronomics’ (a reference to the accounting fraud carried out by US energy giant Enron, bankrupted in 2001), and the more euphemistic ‘earnings management,’ which is used by accounting regulators and the academic community.
			\|}
	~~<div class="toccolours mw-collapsible mw-collapsed">~~
	~~‘Window dressing’ describes a pretence or a façade, a showy misrepresentation of an idea or policy in an attempt to disguise an undesirable reality.~~ The term is derived from the retail sector, where it means decorating a shop window with goods and trimmings in order to attract customers. In the financial sector, it denotes the deliberately misleading manipulation of a company’s income statement and balance sheet in order to create a falsely attractive image and thereby conceal poor performance or monetary losses; it may also refer to an excessively negative presentation of such figures. In the financial context, ‘window dressing’ is synonymous with ‘cooking the books,’ ‘creative accounting,’ ‘Enronomics’ (a reference to the accounting fraud carried out by US energy giant Enron, bankrupted in 2001), and the more euphemistic ‘earnings management,’ which is used by accounting regulators and the academic community.

	~~<div class="mw-collapsible-content">~~

	[[File:Cornered18Oct2012 by Mike Baldwin.gif\|300px\|thumb\|left\|Cornered 18 Oct 2012 by Mike Baldwin]]		[[File:Cornered18Oct2012 by Mike Baldwin.gif\|300px\|thumb\|left\|Cornered 18 Oct 2012 by Mike Baldwin]]
Line 33:		Line 50:

	As the 2008 banking crisis showed, however, such regulatory measures have had little or no impact on window dressing. As Arthur Levitt (1998<ref>Levitt, A. 1998. The Numbers Game, Speech at the New York University Center for Law and Business, New York, 28 September.</ref>) observed during his tenure as Chairman of the US Securities and Exchange Commission, the culture of the financial community and the structure of the capitalist system seem to ''demand'' that all listed corporations engage in earnings management. Participants in this market play a self-serving game of ‘nods and winks’: as used-car salesmen spin stories to sell vehicles, corporate accountants concoct ‘bullshit’ to satisfy the needs of investors and analysts (Macintosh 2006<ref>Macintosh, N. 2006. ‘Commentary: The FASB and Accounting for Economic Reality; Accounting – Truth, Lies, or “Bullshit”? A Philosophical Investigation,’ Accounting and the Public Interest, 6: 22-36.</ref>, 2009<ref>Macintosh, N. 2009. ‘Accounting and the Truth of Earnings Reports: Philosophical Considerations,’ European Accounting Review, 18(1): 141-175.</ref>) while auditors, who have long deserted their duties (House of Lords 2011<ref>House of Lords Select Committee on Economic Affairs. 2011. Auditors: Market concentration and their role. London: The Stationery Office.</ref>), continue to be ‘lick-arses’ for corporate management (Sikka 2009<ref>Sikka, P. 2009. ‘Financial crisis and the silence of the auditors,’ Accounting, Organizations and Society, 34: 868-873.</ref>).		As the 2008 banking crisis showed, however, such regulatory measures have had little or no impact on window dressing. As Arthur Levitt (1998<ref>Levitt, A. 1998. The Numbers Game, Speech at the New York University Center for Law and Business, New York, 28 September.</ref>) observed during his tenure as Chairman of the US Securities and Exchange Commission, the culture of the financial community and the structure of the capitalist system seem to ''demand'' that all listed corporations engage in earnings management. Participants in this market play a self-serving game of ‘nods and winks’: as used-car salesmen spin stories to sell vehicles, corporate accountants concoct ‘bullshit’ to satisfy the needs of investors and analysts (Macintosh 2006<ref>Macintosh, N. 2006. ‘Commentary: The FASB and Accounting for Economic Reality; Accounting – Truth, Lies, or “Bullshit”? A Philosophical Investigation,’ Accounting and the Public Interest, 6: 22-36.</ref>, 2009<ref>Macintosh, N. 2009. ‘Accounting and the Truth of Earnings Reports: Philosophical Considerations,’ European Accounting Review, 18(1): 141-175.</ref>) while auditors, who have long deserted their duties (House of Lords 2011<ref>House of Lords Select Committee on Economic Affairs. 2011. Auditors: Market concentration and their role. London: The Stationery Office.</ref>), continue to be ‘lick-arses’ for corporate management (Sikka 2009<ref>Sikka, P. 2009. ‘Financial crisis and the silence of the auditors,’ Accounting, Organizations and Society, 34: 868-873.</ref>).
	~~</div>~~
	~~</div>~~

	==References and Bibliography==		==References and Bibliography==
Line 42:		Line 57:
	# Smith, T. 1992. Accounting for Growth: Stripping the Camouflage from Company Accounts. London: Century Business		# Smith, T. 1992. Accounting for Growth: Stripping the Camouflage from Company Accounts. London: Century Business

	==~~Notes~~==		==References==
	<references />		<references />

	~~[[Category:Informal Practices]]~~
	~~[[Category:Worldwide]]~~
	~~[[Category:Gaming the system]]~~
	~~[[Category:Creating facades]]~~
	~~[[Category:Creative accounting]]~~
	~~[[Category:Entry]]~~

Admin at 13:16, 3 July 2018

2018-07-03T13:16:54Z

← Older revision		Revision as of 13:16, 3 July 2018
Line 50:		Line 50:
	[[Category:Creating facades]]		[[Category:Creating facades]]
	[[Category:Creative accounting]]		[[Category:Creative accounting]]
			[[Category:Entry]]

Admin: Admin moved page Window dressing to Window dressing (Global) without leaving a redirect

2018-06-01T12:05:50Z

Admin moved page Window dressing to Window dressing (Global) without leaving a redirect

← Older revision	Revision as of 12:05, 1 June 2018
(No difference)

Admin at 22:03, 10 September 2016

2016-09-10T22:03:52Z

← Older revision		Revision as of 22:03, 10 September 2016
Line 49:		Line 49:
	[[Category:Gaming the system]]		[[Category:Gaming the system]]
	[[Category:Creating facades]]		[[Category:Creating facades]]
			[[Category:Creative accounting]]

Admin at 20:30, 10 September 2016

2016-09-10T20:30:24Z

← Older revision		Revision as of 20:30, 10 September 2016
Line 27:		Line 27:

	To remove debt or liabilities from the balance sheet – and thereby improve a company’s risk-profile or creditworthiness – various ‘off-balance sheet’ tricks are employed. These include the sale and leaseback of assets, where finance leases are dubiously classified as operating leases, and the use of ‘special purpose entities.’ In the latter case, various types of entities such as partnerships, joint ventures and trusts are excluded from the balance sheet because of their ‘materiality,’ that is, their insignificant impact on investors (IASB 2010<ref>International Accounting Standards Board. 2010. The Conceptual Framework for Financial Reporting. IFRS Foundation.</ref>).		To remove debt or liabilities from the balance sheet – and thereby improve a company’s risk-profile or creditworthiness – various ‘off-balance sheet’ tricks are employed. These include the sale and leaseback of assets, where finance leases are dubiously classified as operating leases, and the use of ‘special purpose entities.’ In the latter case, various types of entities such as partnerships, joint ventures and trusts are excluded from the balance sheet because of their ‘materiality,’ that is, their insignificant impact on investors (IASB 2010<ref>International Accounting Standards Board. 2010. The Conceptual Framework for Financial Reporting. IFRS Foundation.</ref>).

			[[File:Artist with figures.png\|300px\|thumb\|right\|Artist with figures]]

	These techniques are well known, yet little has been done about them. In the UK, regulators and the accounting profession have revised the corporate governance and ethics codes, issued reporting standards that focus on the economic substance of transactions (ASB 1994<ref>Auditing Standards Board (ASB). 1994. Financial Reporting Standard 5 – Reporting the Substance of Transactions. Kingston upon Thames: ASB.</ref>, 2003<ref>ASB. 2003. Amendment to Financial Reporting Standard 5 – Reporting the Substance of Transactions: Revenue Recognition. Kingston upon Thames: ASB.</ref>) and consulted widely on the quality of auditing practice (APB 2001<ref>Auditing Practices Board (APB). 2001. Consultation Paper: Aggressive Earnings Management. London: APB.</ref>, 2010<ref>APB. 2010. Discussion Paper: Auditor Scepticism: Raising the Bar. London: APB.</ref>, 2012<ref>APB. 2012. Professional Scepticism: Establishing a Common Understanding and Reaffirming its Central Role in Delivering Audit Quality. London: APB.</ref>). In response to the Enron, WorldCom and other accounting frauds, US regulators created the Sarbanes-Oxley Act of 2002 which imposed stricter requirements on auditors and senior executives as regards the accuracy and completeness of financial reports.		These techniques are well known, yet little has been done about them. In the UK, regulators and the accounting profession have revised the corporate governance and ethics codes, issued reporting standards that focus on the economic substance of transactions (ASB 1994<ref>Auditing Standards Board (ASB). 1994. Financial Reporting Standard 5 – Reporting the Substance of Transactions. Kingston upon Thames: ASB.</ref>, 2003<ref>ASB. 2003. Amendment to Financial Reporting Standard 5 – Reporting the Substance of Transactions: Revenue Recognition. Kingston upon Thames: ASB.</ref>) and consulted widely on the quality of auditing practice (APB 2001<ref>Auditing Practices Board (APB). 2001. Consultation Paper: Aggressive Earnings Management. London: APB.</ref>, 2010<ref>APB. 2010. Discussion Paper: Auditor Scepticism: Raising the Bar. London: APB.</ref>, 2012<ref>APB. 2012. Professional Scepticism: Establishing a Common Understanding and Reaffirming its Central Role in Delivering Audit Quality. London: APB.</ref>). In response to the Enron, WorldCom and other accounting frauds, US regulators created the Sarbanes-Oxley Act of 2002 which imposed stricter requirements on auditors and senior executives as regards the accuracy and completeness of financial reports.

	~~[[File:Artist with figures.png\|300px\|thumb\|right\|Artist with figures]]~~

	As the 2008 banking crisis showed, however, such regulatory measures have had little or no impact on window dressing. As Arthur Levitt (1998<ref>Levitt, A. 1998. The Numbers Game, Speech at the New York University Center for Law and Business, New York, 28 September.</ref>) observed during his tenure as Chairman of the US Securities and Exchange Commission, the culture of the financial community and the structure of the capitalist system seem to ''demand'' that all listed corporations engage in earnings management. Participants in this market play a self-serving game of ‘nods and winks’: as used-car salesmen spin stories to sell vehicles, corporate accountants concoct ‘bullshit’ to satisfy the needs of investors and analysts (Macintosh 2006<ref>Macintosh, N. 2006. ‘Commentary: The FASB and Accounting for Economic Reality; Accounting – Truth, Lies, or “Bullshit”? A Philosophical Investigation,’ Accounting and the Public Interest, 6: 22-36.</ref>, 2009<ref>Macintosh, N. 2009. ‘Accounting and the Truth of Earnings Reports: Philosophical Considerations,’ European Accounting Review, 18(1): 141-175.</ref>) while auditors, who have long deserted their duties (House of Lords 2011<ref>House of Lords Select Committee on Economic Affairs. 2011. Auditors: Market concentration and their role. London: The Stationery Office.</ref>), continue to be ‘lick-arses’ for corporate management (Sikka 2009<ref>Sikka, P. 2009. ‘Financial crisis and the silence of the auditors,’ Accounting, Organizations and Society, 34: 868-873.</ref>).		As the 2008 banking crisis showed, however, such regulatory measures have had little or no impact on window dressing. As Arthur Levitt (1998<ref>Levitt, A. 1998. The Numbers Game, Speech at the New York University Center for Law and Business, New York, 28 September.</ref>) observed during his tenure as Chairman of the US Securities and Exchange Commission, the culture of the financial community and the structure of the capitalist system seem to ''demand'' that all listed corporations engage in earnings management. Participants in this market play a self-serving game of ‘nods and winks’: as used-car salesmen spin stories to sell vehicles, corporate accountants concoct ‘bullshit’ to satisfy the needs of investors and analysts (Macintosh 2006<ref>Macintosh, N. 2006. ‘Commentary: The FASB and Accounting for Economic Reality; Accounting – Truth, Lies, or “Bullshit”? A Philosophical Investigation,’ Accounting and the Public Interest, 6: 22-36.</ref>, 2009<ref>Macintosh, N. 2009. ‘Accounting and the Truth of Earnings Reports: Philosophical Considerations,’ European Accounting Review, 18(1): 141-175.</ref>) while auditors, who have long deserted their duties (House of Lords 2011<ref>House of Lords Select Committee on Economic Affairs. 2011. Auditors: Market concentration and their role. London: The Stationery Office.</ref>), continue to be ‘lick-arses’ for corporate management (Sikka 2009<ref>Sikka, P. 2009. ‘Financial crisis and the silence of the auditors,’ Accounting, Organizations and Society, 34: 868-873.</ref>).

Admin at 20:29, 10 September 2016

2016-09-10T20:29:51Z

← Older revision		Revision as of 20:29, 10 September 2016
Line 29:		Line 29:

	These techniques are well known, yet little has been done about them. In the UK, regulators and the accounting profession have revised the corporate governance and ethics codes, issued reporting standards that focus on the economic substance of transactions (ASB 1994<ref>Auditing Standards Board (ASB). 1994. Financial Reporting Standard 5 – Reporting the Substance of Transactions. Kingston upon Thames: ASB.</ref>, 2003<ref>ASB. 2003. Amendment to Financial Reporting Standard 5 – Reporting the Substance of Transactions: Revenue Recognition. Kingston upon Thames: ASB.</ref>) and consulted widely on the quality of auditing practice (APB 2001<ref>Auditing Practices Board (APB). 2001. Consultation Paper: Aggressive Earnings Management. London: APB.</ref>, 2010<ref>APB. 2010. Discussion Paper: Auditor Scepticism: Raising the Bar. London: APB.</ref>, 2012<ref>APB. 2012. Professional Scepticism: Establishing a Common Understanding and Reaffirming its Central Role in Delivering Audit Quality. London: APB.</ref>). In response to the Enron, WorldCom and other accounting frauds, US regulators created the Sarbanes-Oxley Act of 2002 which imposed stricter requirements on auditors and senior executives as regards the accuracy and completeness of financial reports.		These techniques are well known, yet little has been done about them. In the UK, regulators and the accounting profession have revised the corporate governance and ethics codes, issued reporting standards that focus on the economic substance of transactions (ASB 1994<ref>Auditing Standards Board (ASB). 1994. Financial Reporting Standard 5 – Reporting the Substance of Transactions. Kingston upon Thames: ASB.</ref>, 2003<ref>ASB. 2003. Amendment to Financial Reporting Standard 5 – Reporting the Substance of Transactions: Revenue Recognition. Kingston upon Thames: ASB.</ref>) and consulted widely on the quality of auditing practice (APB 2001<ref>Auditing Practices Board (APB). 2001. Consultation Paper: Aggressive Earnings Management. London: APB.</ref>, 2010<ref>APB. 2010. Discussion Paper: Auditor Scepticism: Raising the Bar. London: APB.</ref>, 2012<ref>APB. 2012. Professional Scepticism: Establishing a Common Understanding and Reaffirming its Central Role in Delivering Audit Quality. London: APB.</ref>). In response to the Enron, WorldCom and other accounting frauds, US regulators created the Sarbanes-Oxley Act of 2002 which imposed stricter requirements on auditors and senior executives as regards the accuracy and completeness of financial reports.

			[[File:Artist with figures.png\|300px\|thumb\|right\|Artist with figures]]

	As the 2008 banking crisis showed, however, such regulatory measures have had little or no impact on window dressing. As Arthur Levitt (1998<ref>Levitt, A. 1998. The Numbers Game, Speech at the New York University Center for Law and Business, New York, 28 September.</ref>) observed during his tenure as Chairman of the US Securities and Exchange Commission, the culture of the financial community and the structure of the capitalist system seem to ''demand'' that all listed corporations engage in earnings management. Participants in this market play a self-serving game of ‘nods and winks’: as used-car salesmen spin stories to sell vehicles, corporate accountants concoct ‘bullshit’ to satisfy the needs of investors and analysts (Macintosh 2006<ref>Macintosh, N. 2006. ‘Commentary: The FASB and Accounting for Economic Reality; Accounting – Truth, Lies, or “Bullshit”? A Philosophical Investigation,’ Accounting and the Public Interest, 6: 22-36.</ref>, 2009<ref>Macintosh, N. 2009. ‘Accounting and the Truth of Earnings Reports: Philosophical Considerations,’ European Accounting Review, 18(1): 141-175.</ref>) while auditors, who have long deserted their duties (House of Lords 2011<ref>House of Lords Select Committee on Economic Affairs. 2011. Auditors: Market concentration and their role. London: The Stationery Office.</ref>), continue to be ‘lick-arses’ for corporate management (Sikka 2009<ref>Sikka, P. 2009. ‘Financial crisis and the silence of the auditors,’ Accounting, Organizations and Society, 34: 868-873.</ref>).		As the 2008 banking crisis showed, however, such regulatory measures have had little or no impact on window dressing. As Arthur Levitt (1998<ref>Levitt, A. 1998. The Numbers Game, Speech at the New York University Center for Law and Business, New York, 28 September.</ref>) observed during his tenure as Chairman of the US Securities and Exchange Commission, the culture of the financial community and the structure of the capitalist system seem to ''demand'' that all listed corporations engage in earnings management. Participants in this market play a self-serving game of ‘nods and winks’: as used-car salesmen spin stories to sell vehicles, corporate accountants concoct ‘bullshit’ to satisfy the needs of investors and analysts (Macintosh 2006<ref>Macintosh, N. 2006. ‘Commentary: The FASB and Accounting for Economic Reality; Accounting – Truth, Lies, or “Bullshit”? A Philosophical Investigation,’ Accounting and the Public Interest, 6: 22-36.</ref>, 2009<ref>Macintosh, N. 2009. ‘Accounting and the Truth of Earnings Reports: Philosophical Considerations,’ European Accounting Review, 18(1): 141-175.</ref>) while auditors, who have long deserted their duties (House of Lords 2011<ref>House of Lords Select Committee on Economic Affairs. 2011. Auditors: Market concentration and their role. London: The Stationery Office.</ref>), continue to be ‘lick-arses’ for corporate management (Sikka 2009<ref>Sikka, P. 2009. ‘Financial crisis and the silence of the auditors,’ Accounting, Organizations and Society, 34: 868-873.</ref>).

	~~[[File:Artist with figures.png\|300px\|thumb\|left\|Artist with figures]]~~
	</div>		</div>
	</div>		</div>

Admin at 20:29, 10 September 2016

2016-09-10T20:29:17Z

← Older revision		Revision as of 20:29, 10 September 2016
Line 14:		Line 14:
	<div class="mw-collapsible-content">		<div class="mw-collapsible-content">

	[[File:Cornered18Oct2012.gif\|300px\|thumb\|left\|Cornered 18 Oct 2012 by Mike Baldwin]]		[[File:Cornered18Oct2012 by Mike Baldwin.gif\|300px\|thumb\|left\|Cornered 18 Oct 2012 by Mike Baldwin]]

	There are many reasons why companies engage in ‘window dressing.’ Manipulating earnings upwards may help executives to hide poor decisions (such as value-destroying acquisitions), mitigate potential breaches of debt covenants (such as interest cover), meet analysts’ forecasts and boost share prices as a way of attracting investors. Managing earnings downwards may on the other hand help companies to secure government subsidies or relief, avoid or evade taxation, and pre-empt regulatory interference (such as anti-trust regulation). Meanwhile all these forms of manipulation can, of course, help to boost managers’ remuneration.		There are many reasons why companies engage in ‘window dressing.’ Manipulating earnings upwards may help executives to hide poor decisions (such as value-destroying acquisitions), mitigate potential breaches of debt covenants (such as interest cover), meet analysts’ forecasts and boost share prices as a way of attracting investors. Managing earnings downwards may on the other hand help companies to secure government subsidies or relief, avoid or evade taxation, and pre-empt regulatory interference (such as anti-trust regulation). Meanwhile all these forms of manipulation can, of course, help to boost managers’ remuneration.