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voodoo accounting

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Financial Dictionary

Voodoo Accounting

Any form of accounting that does not follow principles of conservatism. While there are many methods by which financial statements can be fudged, it always comes down to inflating revenue or hiding expenses. Examples of accounting shenanigans include the big bath, cookie jar accounting and improper recognition of revenue.

Investopedia Commentary

Any method that boosts profitability through accounting tricks eventually catches up with the company. As soon as it does "poof", past profits disappear like magic. (Hence the name "voodoo accounting").

Related Links

Cooking The Books 101
Off-Balance-Sheet Entities: The Good, The Bad And The Ugly

See also: Accounting, Big Bath, Cook the Books, Cookie Jar Accounting, Restatement

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