Quotes About Accounting rules

Capital expenditures are an essential tool for managers to make a good business grow bigger and better. But malleable accounting rules permit managers to inflate reported profits by transforming normal operating expenses into capital assets. As the Global Crossing case shows, the intelligent investor should be sure to understand what, and why, a company capitalizes.

The accounting rules allowed them to assume the loans would be repaid, and not prematurely. This assumption became the engine of their doom.

Managers don't have to cook the books to manipulate earnings; they often have all the power they need in the leeway built into accounting rules.

non-Western countries had, until quite recently, highly unreliable legal systems and differing accounting rules. If a foreign trading partner decided to default on its debts, there was little that an investor situated on the other side of the world could do. In the first era of globalization, the solution to this problem was brutally simple but effective: to impose European rule.