Cook The Books

	Definition of 'Cook The Books' A buzzword describing fraudulent activities performed by corporations in order to falsify their financial statements. Typically, cooking the books involves augmenting financial data to yield previously non-existent earnings. Examples of techniques used to cook the books involve accelerating revenues, delaying expenses, manipulating pension plans and implementing synthetic leases.
	Investopedia explains 'Cook The Books' During the first couple of years of the new millennium, large Fortune 500 companies such as Enron and WorldCom were found to have been cooking the books to improve their financial figures. The resulting scandals gave investors and regulators a rude awakening concerning the reality that companies were hiding the ugly truth between the lines of financial data. In order to rally investor confidence, the Sarbanes-Oxley Act of 2002 was created. This act of Congress created policies to protect investors against future incidents of corporate fraud.
	Related Video for 'Cook The Books'

Related Definitions

Top 8 Ways Companies Cook The Books

Find out more about the fraudulent accounting methods some companies use to fool investors.
Putting Management Under The Microscope

We tell you where to find the telltale signs of corporate misdeeds.
How The Sarbanes-Oxley Era Affected IPOs

After the infamous collapse of companies like Tyco, Enron and WorldCom, the government responded to try and prevent it from happening again.
Introduction To Fundamental Analysis

Learn this easy-to-understand technique of analyzing a company's financial statements and reports.
Off-Balance-Sheet Entities: An Introduction

The theory and practice of these entities varies greatly. Investors need to learn what they're getting into.
To whom was the term "corporate kleptocracy" first applied?
Revenue Projections Show Profit Potential

Examining how a company makes money can offer clues about its earnings potential.
Spotting Profitability With ROCE

This straightforward ratio measures whether a company is efficient, money-making or neither.
Analyze Cash Flow The Easy Way

Find out how to analyze the way a company spends its money to determine whether there will be any money left for investors.
Digging Into Book Value

This calculation will serve up your portion of the shareholder pie.

Why Americans Think Bush Is To Blame For The Economy	The Complete Guide To Calculating Your Net Worth		Top Investment Trends For 2013	5 Viable Career Options In 2013
	How Do Internet Browsers Make Money?	Commodities Of The Future	Trending Stocks And The January Effect