Euphemistic, trivializing term for all tricks and dodges with which a balance sheet is cooked up in such a way that it serves a desired result. – Basically, this always involves – hiding a profit, e.g. from the tax office or a subsidy-granting authority, or – concealing a loss, e.g. from the bank granting the loan. – Unfortunately, as past experience has shown, in many cases even auditors focused on the interpretation of financial statements of a particular industry were not able to see through such factual arrangements. Apparently, the more mathematical-statistical methods were used, such as discriminant analysis or logistic regression, the less the auditors seemed to be able to do so). – See disclosures, disguised, off-balance sheet, balance sheet cosmetics, stock market fraud, accounting, creative, accounting, manipulative, corporate governance, enforcement, financial reporting, financial mathematics, information overload, intra-quarter ballooning, crystallization, management pay, abusive, cherry-picking, consistency, substance-over-form principle, loss camouflage, understandability.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/