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Chapter 9. Goosing, Stuffing, and Faking... > Red Flag 9: Companies That Indulge i...

Red Flag 9: Companies That Indulge in Barter Deals Should Raise Suspicions

Companies that sell their wares and don’t receive cold hard cash in return but instead get payment in goods and services or through other arrangements should be watched carefully. Too often, such barter arrangements blow up or lead to accounting scandals. During the Internet stocks boom, such arrangements were normal. The problem was that when the companies at the other end of the transactions went out of business or provided services of dubious value in return, the barter often collapsed. “If you go back to the beginning of the Internet boom, I think that is where a lot of the emphasis on revenue got started because there weren’t any profits, so let’s do what we can to show things gross rather than net, let’s do barter with my web site or yours,” said Ciesielski.


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