Manipulation 3 / 11

Manipulation

Accountants can sometimes twist how they do the accounting to make the financial statements look better, even if it doesn't really show what's actually happening. The way they choose to do the accounting can change how things like earnings per share, return on capital employed, and gearing look.

This can be a big deal when:

1. Standards allow choices of accounting treatment (Investment Property - Fair Value or Cost)
2. Judgement is needed when they make accounting estimates. (eg Depreciation Policy)
3. There's no accounting standard for it

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