"Fishy accounting" or "awful close to a con job" or "Hollywood accounting" seemed like rude ways to refer to accounting practices that purposely gussy up a company's books. So the good people of the financial community came up with the euphemism "aggressive accounting."
Sometimes these steps can be illegal, or very close to illegal. In these situations, you can call it "aggressive accounting" the way you could call World War II "aggressive diplomacy." Other times, the accounting practices don't cross a moral line, but just put a company's finances in the best possible light.
The truth is that accounting seems pretty straightforward, but there is a lot of grey area. Expenses and revenues can be categorized in a lot of different ways, or the timelines of payments and revenues can be massaged to take advantage of loopholes. Like how a good lawyer can make things legal (or at least seem legal) that a bad lawyer couldn't, a good accountant can get aggressive with the books and save (or even make) a company money.
There are a couple of main reasons for aggressive accounting. A company might look to lower its tax bill, so its accountants structure things to take advantage of the fine print of the tax code. Or a company might try to make its revenue and profits look as big as possible, in order to impress shareholders or entice an acquisition offer.
Related or Semi-related Video
Finance: What is Adverse Audit Opinion?27 Views
Finance a la shmoop. What is an adverse audit opinion and you know deficiency
letter. Okay people this is not good you thought you had good grades but when [Report card is thrown onto the desk]
you got your report card your teachers had opinions adverse to yours... [Report card has bad grades in it]
They sent your parents a deficiency letter you know the one with all those [Mom looks shocked]
D's on it well when it's a company's audit that has similarly gone awry it's [Boss looks angry and employee looks shocked]
the nice way to say it well then it means they didn't count the beans
properly when they gave their financial reports to their investors or whoever
the auditors were serving usually this implies that companies overstated how [Employee counting coffee beans]
profitable they really were or how well they were really doing so tens of
thousands of investors if you know the company was public when this all [Big line of people waiting to invest]
happened paid twenty seven dollars and 32 cents a share when with the real
numbers the stock probably should have been trading more at like you know
fourteen dollars and 27 cents a share big difference well basically an auditor
is saying that yours are not bread-and-butter misstatements no oops [Bean report with the numbers crossed out]
it's more of a dude there were material ie important
mistakes and they were pervasive like everywhere math, science, english, history
your failure it's no mystery that's how auditors talk really
all right well then there are massive losses to massive numbers of people who hire [Protesters on a street]
massive numbers of lawyers who sue you.. massively.. in the world of finance an
adverse audit opinion is a bit like running over everyone's favorite dog [Car goes over a bump]
several times only you're the one who is likely dead meat [Guy reverses and runs the dog over again and the owner comes to fight]
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