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Window dressing

It may involve timing transactions or presenting information in a way that obscures the underlying position. Whether a transaction or disclosure complies with law and standards depends on the facts; deliberate material misstatement or omission is not permissible. An analyst should consider period-end balance changes, subsequent reversals, cash flows and notes, and a professional accountant should address ethical threats and misleading information.

Worked example

A business delays paying suppliers until just after year end to show a temporarily higher cash balance. The cash figure may be accurate at the reporting date, but an analyst also examines the higher payables and subsequent payments.

Common mistake

Assuming a favourable year-end balance proves sustained liquidity, or treating any unusual transaction as fraud without investigating the facts.

Where it appears in your exams

QualificationExamRelationshipPeriod
ACCA FR Direct September 2026–June 2027
ACCA SBR Direct September 2026–June 2027