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FBN’s Adam Shapiro on 20% of CFOs in a survey admitting to misrepresenting their company’s performance often to boost the stock price or meet earn...
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-- it's -- a big week of quarterly earnings that despite some big -- is from the likes of apple and Ford.
More than 65%.
Of companies who reported have beaten expectations.
Or have -- a new survey out of every at duke suggests that we might not want to put too much faith in those numbers.
After questioning a 169 -- opposed from publicly traded companies.
They found that roughly 20% of all firms.
Are lying about the numbers how does not possible let's bring in fox business's Adam Shapiro for more on this Adam.
Well it's not exactly Enron accounting but think creative accounting Melissa the this -- these CFOs that they interviewed and as you said.
Roughly 1169.
Of them taking pardon is.
Actually said that they felt pressure to use creative accounting some people call it lying to.
The number one reason 94%.
Agreed roughly two influence stock price.
Then the second most common reason they did this was because there's an outside pressure to hit earning benchmarks.
That -- third reason the -- three in this total survey because there's inside pressure.
To hit earning benchmarks then among the top ten reasons they do this is executive compensation.
But the way they do this Melissa and you can just think back recently not -- it's.
Necessarily illegal but he get things like dead valuation adjustments banks do this all the time perfectly acceptable accounting maneuver it has been legal since 2008.
When they were first allowed to do -- essentially they can call loss -- gain it's a little complicated as to why they do it but if you and I were to do this let's say you -- got a mortgage for 300000 dollars.
The up property falls in value to 250000.
You could count the 50000 dollar adjustment as a game.
That some of what's going on here so that's 18%.
Saying that they do this in those reasons why it should when you we did the earnings reports today for companies like saying -- and whole foods.
When you look at what's happened with the S&P you have so many companies they constantly outperform their earnings expectations -- -- quarter after quarter after quarter there's no realistic way that that could be accurate.
Yeah no you're absolutely right I mean that makes a lot of sense -- out of.
