The expression “cook the books” ref

The expression “cook the books” refers to the practice of arranging company financials in a manner that tends to call attention to positive data but obscures or greatly minimizes the ability to identify negative data. As a result, this type of creative accounting helps to present a false image of the true nature of the company’s financial condition. While most companies that choose to cook the books make it a point to stay barely within the legal restrictions that relate to keeping company records, there are instances where information is omitted or falsified as part of the process.

There are several reasons why a business may choose to cook the books. One motive is to secure additional funding in order to maintain or expand the business. To that end, the business may develop a set of company books to show prospective lenders or investors. The data is arranged so that the business appears to be more profitable and stable than properly organized accounting records would indicate.

A company may choose to cook the books in an attempt to improve financial status perceptions within the business community. For example, the corporation may make public data that spotlights the sales figures for a recent period, while failing to indicate how operating and raw materials expenses cut deeply into the revenue generated from those sales. The figures may also fail to note how much of those sales are currently classified as over 120 days in arrears or as bad debt.

The main task of a hotel auditor customarily focuses on processing payments from the guests. He typically reviews each transaction to ensure the funds have been transferred to the hotel coffers from credit card and debit card transactions. If discrepancies or problems are discovered, the auditor is normally expected to resolve them with expediency.