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Smoke and Mirrors, Inc. - Accounting for Capitalism (Hardcover, Annotated edition)
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Smoke and Mirrors, Inc. - Accounting for Capitalism (Hardcover, Annotated edition)
Series: Cornell Studies in Money
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Enron, Arthur Andersen, Parmalat, AIG: business headlines over the
last few years have stimulated worldwide interest in accounting
responsibilities and standards. Smoke and Mirrors, Inc., is a
remarkable introduction to contemporary accounting and its central
importance for the operation of modern capitalism. Nicolas Veron,
Matthieu Autret, and Alfred Galichon show how accounting always
mirrored the features of contemporaneous financial systems, while
remaining intrinsically subject to judgment and uncertainty and
thus leaving scope for manipulation that can convert a rotten
balance sheet into a picture of robust financial health. Beginning
with the story of the fictional company Smoke & Mirrors Inc.,
Veron and his coauthors provide a brief history of accounting's
emergence and its key concepts and practices. They then shift their
focus to the political economy of the various actors involved in
the preparation, auditing, and use of financial information and the
new challenges facing regulators as capital markets spread across
national boundaries. The authors challenge widespread beliefs that
accounting practices are neutral and involve the mere reporting of
objective data. They trace how different accounting standards,
which alter the calculus of what counts as a "fair representation"
of business dealings, can change economic behavior. Along the way
they provide numerous examples and case studies, including a
detailed account of the tricks with which Enron cooked its books.
For students of corporate finance, practicing accountants and
businesspeople, and general readers who have followed a seemingly
endless parade of financial scandals with disbelief, Smoke and
Mirrors, Inc., provides a clear and concise overview of the use and
abuse of accounting and of the underlying changes in today's
capital markets.
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