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are finance professionals still into cookie jar accounting these days ?
cookie jar accounting is a term used in finance for stashing revenues into a separate account when the good times are rolling
when the lean times arrive , the money from this stash would be used for increasing revenues / window dressing the accounts
it is illegal , some companies listed in the us stock exchange have been fined by the relevant authorities for this
there is another term called big bath .. when you have a bad quarter , you put all the bad news in that quarter , so that the next quarter seems much better and the stock jumps a lot on meeting or beating expectations
generally , CFO’s are known to be conservative with their revenues .. they give estimates towards the lower end of the spectrum, so when there is a meeting or beating of the expectations , the stock is known to jump
one famous example of cookie jar accounting was the computer maker dell – it was fined us 100 million dollars for dressing up it’s accounts with payments received from Intel to keep Intel chips and other components exclusively in dell and not looking at it’s competitors – this would classify as anti-trust behavior on Intel’s part