On Creative Accounting: Two Creativity Myths

Harvard Business Review

"Creative accounting" is really bad. For me, it evokes a wonderful old New Yorker cartoon by Robert Weber , where a small, meek accountant stands before the desk of an overfed chief executive exhorting the accountant to rescue the company: "It's up to you now, Miller. The only thing that can save us is an accounting breakthrough." Wall Street's " financial innovations " of recent years seem to have given creativity a bad name.

GAAP 17

We Can’t Study Short-Termism Without the Right Metrics

Harvard Business

FCLT and McKinsey rely on readily available and machine-readable accounting data to measure myopia. By spinning their accounting performance, they may postpone having to make hard strategic decisions. Third, firms understate their depreciation expense because they assume that their long-lived assets will retain their worth over the long term — even though technological change increasingly makes them obsolete. Creative accounting measures.