What is the reworking?

reworking is a repair or revision on one of the accounting statements issued by the company for a specific period of time. In some cases, the reason is to repair a random omission of financial data, a broadcast error or other type of unintentional error. More frequently, reworking becomes necessary when there has been a deliberate attempt to cook books or falsify financial data and the activity was revealed. These methods are sometimes referred to as the table accounting, Voodoo accounting or Jar Cookie accounting.

There are a number of ways to make simple errors in keeping accounting records, resulting in a need to release overwork. In some cases, the amount of the receivable or due is transferred or the costs of the incorrect line item are used. Transmission errors can often be identified by periodic internal audits of accounting records by comparing the backup documentation for each transaction. If these errors are identified after the financial statements are published, it is necessary to correct these errorsAnd then prepare a revised statement that more precisely reflects the real financial situation of the company.

It is also possible that reworking is needed to discover when deliberate attempts to distort the company's finance. These experiments, sometimes referred to as Jar Cookie accounting, often use barely legal and unlawful procedures to create perception that the company does not make a profit when it really is doing. The same so -called voodoo accounting procedures can also be used to get profit when the income is created in the period considerably smaller than reported.

For example, the company can try to cook books in an effort to ensure the census benefits that would not be possible if the real status of corporate finances were reported. Similarly, the company can arrange financial records in a way that gives potential investors the impression that business is more solvent as it really is, andThus, it increases their chances of attracting new investors. If the activity used to create these false perceptions was revealed, the steps to remedy books and the presentation of the reworking that is realistic are often part of the restitution that the Company must take together with the payment of fines or sanctions imposed by regulators.