Companies that 'tweak' their books can face severe consequences. These can include legal penalties, such as fines and imprisonment for those involved, if the tweaking is found to be illegal. The company's reputation can also be severely damaged, leading to loss of business and plummeting stock prices. In extreme cases, it can lead to the company's bankruptcy, as was the case with Enron.
Financial statements do not always tell the entire story about a company. Accounting methods and fi...
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