SBR syllabus

Companies might make it seem like they have more cash by playing with cash flows. Changing how they present asset sales in the cash flow statement alters what's considered operating and investing cash, giving a different picture.

Cash flow categories are important, especially sustainable operating cash for interest and taxes. Managers may face pressure to bend the truth, and accountants need high integrity to resist. The accounting profession's reputation hinges on it.

Company accountants must prevent masking the true cash flow statement nature. Labeling asset sales as operating cash would mislead users, even with accurate captions (like "equipment sale proceeds"). Deliberate misleading is unacceptable.

The accountant should persuade directors to follow proper accounting and standards. Auditors must question such blatant non-compliance since it affects the financial statements' truth and fairness.