Unveiling The Deceptive Practice: An In-Depth Conceptual Analysis of Financial Shenanigans

Abstract ―​

Financial reporting conveys information about the financial soundness of a particular organisation to all stakeholders. Corporations sometimes use financial statements to mislead stakeholders rather than inform them about their performance. Corporate financial scandals have existed since the formation of corporations. Different financial tricks have been used by dishonest management to take advantage of naive investors. While most businesses report their results and figures to investors honestly, a significant number of them use accounting or financial tricks to conceal the truth. These tricks are commonly termed as Financial Shenanigans. Management employs these strategies to deceive investors regarding the soundness of the company. Corporate financial shenanigans are hidden in the shadows of creative accounting. Since additional evidence of misconduct may not be visible directly in the numbers, it is imperative to review what's written in footnotes, quarterly earnings releases, and other publicly accessible management statements. As a result, it is critical for all stakeholders, particularly the general public, to be aware of financial irregularities. The purpose of this research paper is to give readers an overview of Financial Shenanigans in terms of their meaning, their types, the ways of identifying them, the reasons for their occurrence, the measures of preventing them, some popular cases and their impact on investors.