Wat is Creative Accounting?how to do Creative Accounting?
Answers:
I always believed this referred to "shady" or "suspicious" accounting practices.
Things like, calling that bar tab from a night out with your buddies as a business expense...
Maybe I'm off base on this one though.
Creative accounting is essentially a way to "bend" the rules or mislead people. Enron executives shifted gains of one division to cover losses of another division, and performed other shady accounting to make things look rosier than they actually were.
cheating and dishonest
Illegal...
This is also called "window dressing" where you try to show a good picture of the financial position of the company by taking advantage of loopholes in the accounting system or sometimes "cheating".
This happens especially in the areas like consolidation, calculating ratios, taxation.
For example,if you have a subsdiary in a foreign country and its tax rate is very high, what you would do is you would sell them the raw materials at a price higher than the normal reducing the profits of that subsidiary. So you would have only a small tax burden. In order to do this, your country's tax rate should be fair.
The answers post by the user, for information only, BAnswer.com does not guarantee the right.
More Related Questions and Answers...