Accounting and auditing standards have come under scrutiny in the wake of recent high-profile bank failures. Investigations are currently underway about what went wrong with Silicon Valley Bank and Signature Bank. But it’s likely that some “gray areas” in the accounting rules were exploited to make these organizations appear more economically secure in their year-end financial statements than they truly were. Lessons from Enron Andrew Fastow often speaks publicly about the issue of financial misstatement. As a convicted felon, Fastow has a unique perspective on fraud: He was the CFO of Enron in October 2001 — when it
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Monthly Archives April 2023
How to get more from your company’s income statement
What do you do with your financial statements after your CPA delivers them? If you’re like most business owners and managers, you breathe a sigh of relief that they’re finished, file them away and go back to running the business. But financial statements can be a useful tool to help improve business operations in the future. Eye on profitability The income statement is a good starting point for using your financials to analyze performance and remedy inefficiencies and anomalies. Here are four ratios you can compute from income statement data: 1. Gross profit. This is profit after cost of goods
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