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Asian Financial Statement Analysis: Detecting Financial Irregularities

Book Description

Gain a deeper understanding of Asian financial reporting and how to detect irregularities

The Asian region, and particularly China, is becoming a hotbed of investment activity. There have been quite a few accounting scandals in Asia in the recent years - now rivaling those we have seen in the Americas and Europe. Assessing potential or active overseas investments requires reliance on financial statements, the full parameters of which may vary from region to region. To effectively analyze statements, it is necessary to first understand the framework underlying these financial statements and then lay out a protocol for detecting irregularities. It's impossible to create and implement a practical plan without a deeper knowledge of the various factors at play.

Asian Statement Analysis: Detecting Financial Irregularities provides a framework for analysis that makes irregularities stand out. Authors Chin Hwee Tan and Thomas R. Robinson discuss international financial reporting standards, including characteristics particular to the Asian region. Tan and Robinson's combined background in academia and Asian finance give them a multi-modal perspective and position them as top authorities on the topic. In the book, they address issues such as:

  • Detection of irregularities independent of particular accounting rules

  • The most common irregularities in the Asian market

  • Similarities and differences between U.S. and Asian accounting techniques

  • An overarching framework for irregularity detection

  • The book uses real-world examples to illustrate the concepts presented, with the focus on Asian companies. As the first ever in-depth study on manipulation and irregularities in the Asian market, Asian Financial Statement Analysis: Detecting Financial Irregularities is uniquely positioned to be a valuable resource in the move toward the next phase of global reporting standards.

    Table of Contents

    1. Cover Page
    2. Title Page
    3. Copyright
    4. Dedication
    5. CONTENTS
    6. FOREWORD
    7. GENESIS OF THIS BOOK
    8. ACKNOWLEDGMENTS
    9. INTRODUCTION
      1. WHY FOCUS ON SCANDALS IN ASIA?
      2. HOW THIS BOOK IS ORGANIZED
      3. AS YOU BEGIN
      4. NOTES
    10. CHAPTER 1: A FRAMEWORK FOR EVALUATING FINANCIAL IRREGULARITIES
      1. ARTICULATION OF FINANCIAL STATEMENTS
      2. ACCRUALS AND DEFERRALS
      3. TYPICAL ACCOUNTING GAMES
      4. PARTING COMMENTS
      5. NOTE
      6. REFERENCES
    11. CHAPTER 2: DETECTING OVERSTATED EARNINGS
      1. AGGRESSIVE REVENUE RECOGNITION
      2. UNDERSTATEMENT OR DEFERRAL OF EXPENSES
      3. CLASSIFICATION OF NON-OPERATING INCOME
      4. CLASSIFICATION OF NON-OPERATING EXPENSES
      5. PARTING COMMENTS
      6. CASE STUDIES
      7. REFERENCES
    12. CHAPTER 3: DETECTING OVERSTATED FINANCIAL POSITION
      1. EXCLUDING BOTH ASSETS AND LIABILITIES
      2. OTHER OFF-BALANCE-SHEET FINANCING/LIABILITIES
      3. OVERSTATING ASSETS
      4. PARTING COMMENTS
      5. CASE STUDIES
      6. NOTES
      7. REFERENCES
    13. CHAPTER 4: DETECTING EARNINGS MANAGEMENT
      1. ACCRUALS AND DEFERRALS REVISITED
      2. ACCOUNTS RECEIVABLE (ACCRUED REVENUE) AND THE ALLOWANCE FOR DOUBTFUL ACCOUNTS
      3. DEFERRED (UNEARNED) REVENUE
      4. ACCRUED AND DEFERRED (PREPAID) EXPENSES
      5. DEFERRED TAXES
      6. CONTINGENCIES AND RESERVES
      7. PARTING COMMENTS
      8. CASE STUDIES
      9. REFERENCES
    14. CHAPTER 5: DETECTING OVERSTATED OPERATING CASH FLOWS
      1. UNDERSTANDING THE CASH FLOW STATEMENT
      2. USING CASH FLOW TO ASSESS THE QUALITY OF EARNINGS
      3. CASH FLOW GAMES
      4. PARTING COMMENTS
      5. CASE STUDIES
      6. REFERENCES
    15. CHAPTER 6: EVALUATING CORPORATE GOVERNANCE AND RELATED-PARTY ISSUES
      1. BOARD GOVERNANCE AND INDEPENDENT DIRECTORS
      2. SHAREOWNER RIGHTS
      3. INTERLOCKING OWNERSHIP OR DIRECTORSHIPS
      4. RELATED-PARTY TRANSACTIONS
      5. EXCESSIVE COMPENSATION
      6. PERSONAL USE OR EXPROPRIATION OF ASSETS
      7. LACK OF TRANSPARENCY
      8. AUDITOR ISSUES
      9. PARTING COMMENTS
      10. CASE STUDIES
      11. NOTE
      12. REFERENCES
    16. CHAPTER 7: SUMMARY AND GUIDANCE
      1. PUTTING IT ALL TOGETHER
      2. A RECIPE FOR DETECTING COOKED BOOKS
      3. PARTING COMMENTS
      4. CASE STUDIES
      5. REFERENCES
    17. ABOUT THE AUTHORS