Of all the things that can be manipulated the PNL is the most easily cooked

Rizal Philippines
July 17 2019

                                           Is your accounting department looking like a kitchen?

Despite all  the training and all the PICPA rules on financial reporting and their standards, the PNL can be easily manipulated. Change the accounting standards and you change the Profit and Loss Easily. Thus at most comptrollers are jokingly reported as cooks, magicians.  They can cook the books and create magic.

Thus this was expressed by an Accountant who quarreled with our Chairman early on:   what I place or record in the books, you will never know.  How true.  Or how  they will present the outcome...

I had a finance manager who came from a govt agency.  I told him that I was not pleased with the financial results.

In the afternoon of the day, he showed from a fomer loss PNL to the one that is profitable by at least P20 m. How did he  do it?  He simply capitalized all the expenses.  How smart and convenient.

Did I accept the FS.  No I did not.

The pressure to cook the books and do magic is even stronger for publicly listed companies.  Produce or else -  your company market value will decline and sow with your  compensation and bonuses.

Goodbye professionals.  Welcome cooks