Window dressing is a strategy that companies and financial managers use to manage financial statements and reports to show more optimal results for a period of time. This is especially true when a general business has a large number of shareholders so that the management of general management can show the presence of a managed company on their behalf so that they do not stay in touch with a business for more than a day. It can be used when an organization wants to influence a donor to qualify for the company. If a business is held intensively, owners are generally better informed about the company’s results, so there is no reason to apply window dressing for anyone in the financial statements.
The whole concept of window dressing is clearly unethical, because it is confusing. Also, it only snatches the results of the future period to make the present time look better, so it is extremely short term in nature.
Examples of window dressings are as follows:
-Expenses. Hold supplier invoices so they are recorded at a later time.
-capital. Capitalize small expenses that would normally be charged as expenses, maximizing reported profits.
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