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One way for companies to game the system is to be late in paying their employees & contractors. If these expenses don't show up in the books, then the company c

• deleted 10y ago
  [deleted]
• djcapelis 10y ago
  Any company of a decent size is generally required to use accrual accounting where expenses are booked during the quarter they're incurred not during the quarter they're paid. Paying expenses late is a cash flow management strategy only, and cannot used to change quarterly revenue/expenses for most companies, just CoH. You're always allowed to have different books that you can write articles about and post in PR pieces or give to people, but your IRS books will almost always have to record expenses the quarter they are incurred, not the quarter they're paid unless you're really small and can use cash basis.
• pyromine 10y ago
  That's 100% not GAAP though, definitely would qualify as fraud.
• PeterisP 10y ago
  I believe that GAAP requires accounting for work expenses at the time when the work is performed - e.g. the salary due for last week of March must be counted in March, no matter if you issued a paycheck right at the end of week or haven't paid it yet for whatever reasons. Though, one way for companies to game the system in GAAP is to be late in paying their employees & contractors by having part of their renumeration be in stock options - people perceive it as compensation, but it can be excluded from GAAP since the value technically doesn't come from "within the company" but from reducing the value of other shareholders.