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
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Direct | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |
