CitationDownload as .RIS
Emerald Group Publishing Limited
Copyright © 2007, Emerald Group Publishing Limited
Literature and insights
When you are preparing to tuck in to a juicy accounting statement, how much thought do you give to the various stages of its creation, and whether what you are about to digest is quite what it seems? Is it possibly a work of fancy and illusion, of persuasive show rather than substance? Is it too bizarre to ask whether it reminds you more of fast food than fancy restaurant fare? For a moment, I want to take you down the path of the culinary arts.
What is the equivalent to nouvelle cuisine in an annual report? I imagine it as a very limited amount of very artfully arranged information, which ultimately proves to be shockingly expensive. On the other hand, we have the renewed push for slow food. Think of its parallel in accounting terms and we might picture a report that is put together without haste; the authors (not too many) have luxuriated in the pleasures of the ingredients while respecting the eventual consumer. But then, pace is not everything – a slowly assembled mixture may also be intended to deceive.
The world abounds in metaphors, as many people have observed, and one that has persisted in business is the idea of cooking the books. A recent study of financial misrepresentation in the US (Karpoff et al., 2007) suggests that the costs of such behaviour are high indeed once loss of market value is added to legal and regulatory penalties. These days, a wildly optimistic lateral thinker might then try to claw back some of those losses by planning a reality TV series that capitalises on a firm’s consequent notoriety; anything seems possible when money is to be made. There might even be a role for a charismatic bad-boy or bad-girl accountant counterpart to the modern celebrity-chef (who said Gordon Ramsay?), one who can make the whole job of misleading investors seem glamorous, and even necessary
All of this mental wandering was prompted by a contribution from Lorne Cummings. In order to properly cook some books, one should begin with expert advice such as his detailed instructions, “How to ‘cook your books’ – a recipe for disaster”, which appears below.
When you have read it and finished licking your fingers, you can try cooking up your own piece of creative writing. Send it on to me at the AAAJ! I look forward to tasting the results.
Steve EvansLiterary Editor
Karpoff, J.M., Lee, D.S. and Martin, G.S. (2007), “The cost to firms of cooking the books”, Social Science Research Network, available at http://ssrn.com/abstract=652121 (accessed 4 January 2007)