Tags :SEC red flags

In the high-stakes world of public markets, financial statements are both a compass and a camouflage. While regulators like the SEC have tightened scrutiny post-Enron, creative accounting persists—now with subtler tricks. From inflated cash balances to phantom inventory, here’s how to detect financial shenanganas in US-listed companies, armed with real case studies and forensic accounting techniques. 1. The Cash Conundrum: When “Liquid Assets” Aren’t Liquid Warning Signs: Forensic Tools: 2. Accounts Receivable: The Art of Fictional Sales Telltale Patterns: Case Study:Valient Pharma booked $150M in AR from “Bahamas-based clients”—later exposed as shell companies. 3. Inventory: Where Profits Go to Hide Red Flags: Detection Tactics: 4. Capex Mirage: The “Build It and They Won’t Come” Strategy Warning Signs: Spotting Phantom Assets: 5....

Like(0)SinoLoanExpert2025-04-07Finance 101 accounts receivable fraudcash flow manipulationCFO warning signsdetecting accounting fraudearnings managementfinancial statement fraudforensic accounting techniquesGAAP loopholesInventory FraudSEC red flagsViews()