As Chapter 6 illustrated, companies can grossly distort their earnings through aggressive revenue recognition.

Analysts who arm themselves with appropriate skepticism about financial statements are bound to won­der whether companies also pump up the bottom line by taking liberties in booking expenses. The answer is resoundingly affirmative. Corporate managers are just as creative in minimizing and slowing down the recogni­tion of expenses as they are in maximizing and speeding up the recognition of revenues.