Accounting Noise
The effect of complex and extensive accounting rules that regulate financial statement reporting and are thought to distort a company's true operating performance.
Investopedia Commentary
Accounting noise can be seen as either a consequence of necessary rules regarding generally accepted accounting principles or a result of management's attempts to massage the numbers to present a rosier financial picture of the firm.
For example, a company that has recently undergone a significant merger may look very unprofitable on the income statement because the merger may cause serious one-time charges for the company, it may be useful for investors to cut through the accounting noise to get a more accurate picture of the company's prospects.
Conversely, an underperforming company could engage in earnings manipulation, creating accounting noise to hide its poor performance.
Related Links
Show and Tell: The Importance of Transparency
Understanding Pro-Forma Earnings
Types Of EPS
See also: Aggressive Accounting, Amortization, Balance Sheet, Cook The Books, Cookie Jar Accounting, Generally Accepted Accounting Principles - GAAP, Goodwill, Pro-Forma Earnings, Quarterly Earnings Report