# Explain the accounting scam in "The Accountant" **URL:** \ **Category:** Cafe Society\ **Created:** [December 18, 2017, 3:33pm UTC](https://boards.straightdope.com/t/explain-the-accounting-scam-in-the-accountant/804764 "2017-12-18T15:33:17Z")\ **Posts on this page:** 10\ **Page:** 1
**Author:** ![CookingWithGas](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cookingwithgas/32/485_2.png) [@CookingWithGas](https://boards.straightdope.com/u/CookingWithGas)\ **Post date:** [December 18, 2017, 3:33pm UTC](https://boards.straightdope.com/t/explain-the-accounting-scam-in-the-accountant/804764/1 "2017-12-18T15:33:17Z")
Just watched _The Accountant_ on a flight and the subtleties of the scam went by a little quick. Not being a particularly cerebral movie, you can enjoy it just knowing that, “Bad guys are doing something related to accounting and the protagonist figures it out. Spectacular action scenes ensue.” The gist of it is that a company official was cooking the books to embezzle money but then was putting the money back into the company. There are two things I don’t understand: 1. What are the accounting mechanics of how this would be done? I have a basic understanding of accounting but IANAA. If you could juggle the books to hide taking the money out, why not just move the money around on the books instead of physically moving the cash in and out? 2. Somehow this was going to pump the value of the company up in preparation for an IPO. Why would this scam pump up the value? ---
**Author:** ![duality72](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/duality72/32/3910_2.png) [@duality72](https://boards.straightdope.com/u/duality72)\ **Post date:** [December 18, 2017, 9:09pm UTC](https://boards.straightdope.com/t/explain-the-accounting-scam-in-the-accountant/804764/2 "2017-12-18T21:09:33Z")
I also watched it on a flight and didn’t care to notice too much about the details of the accounting scam, but [the Wikipedia summary](https://en.wikipedia.org/wiki/The_Accountant_(2016_film)) likens it to [the real-life Crazy Eddie fraud](https://en.wikipedia.org/wiki/Crazy_Eddie) of the 1970s/80s. My nickel summary: 1. As a private company, the leaders of the company skim profits from the company in order to avoid paying taxes on it. They make good cash and store it in offshore accounts, but now have a load of blatantly illegal earnings that is of limited use. 2. This can only go so long as it becomes more and more difficult to hide the fraud. In order to keep the money flowing, the company leaders decide to take the company public and profit from pumping the stock in a two-step process. 2a. Stop skimming so that the sudden increase in profit looks like the company is suddenly doing radically better in advance of the IPO (this also helps in that it stops making the previous fraud worse). 2b. After the IPO, start pumping some of the previous skimmed profits back into the company to make it look like the company is taking off like a rocket. 1. Once the company stock is inflated from the unrealistic profits, dump the stock and walk away with your now apparently legal earnings. The accounting behind all of this is extremely complicated and you hope no one figures out until you’re long gone/untouchable somewhere. Which is why Ben Affleck’s character is so remarkable. I guess the even shorter summary is that a company posting modest profits over ten years doesn’t look very special. But if you took those ten years of profits and put them all into the one or two years before an IPO, the company looks ready to take off and is far more appealing to investors you want to scam. ---
**Author:** ![Bryan\_Ekers](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bryan_ekers/32/183_2.png) [@Bryan\_Ekers](https://boards.straightdope.com/u/Bryan_Ekers)\ **Post date:** [December 18, 2017, 11:45pm UTC](https://boards.straightdope.com/t/explain-the-accounting-scam-in-the-accountant/804764/3 "2017-12-18T23:45:54Z")
The nature of the scam, and the revelation that the John Lithgow character (Lamar) is behind it, makes the movie more confusing, though. So one of the accountants, Dana, discovers a minor anomaly in the records and Lamar hires a legendary forensic accountant to audit the place, even though Lamar himself is the one cooking the books? Seems improbable - why not just eliminate (or distract) Dana and carry on? All he’s doing is creating problems for himself. ---
**Author:** ![Orr\_G](https://avatars.discourse-cdn.com/v4/letter/o/ee59a6/32.png) [@Orr\_G](https://boards.straightdope.com/u/Orr_G)\ **Post date:** [December 19, 2017, 3:31am UTC](https://boards.straightdope.com/t/explain-the-accounting-scam-in-the-accountant/804764/4 "2017-12-19T03:31:00Z")
> [@Bryan\_Ekers](#): > > The nature of the scam, and the revelation that the John Lithgow character (Lamar) is behind it, makes the movie more confusing, though. So one of the accountants, Dana, discovers a minor anomaly in the records and Lamar hires a legendary forensic accountant to audit the place, even though Lamar himself is the one cooking the books? Seems improbable - why not just eliminate (or distract) Dana and carry on? All he’s doing is creating problems for himself. I inferred that Lithgow’s character figured an accountant who works alone out of a strip mall wouldn’t be good enough to catch his shenanigans. Plus, it looks good to have an outside accountant verify that the books are clean just before an IPO. The latter point was, IIRC, stated outright at some point). I mean, of course any action thriller is going to stretch credulity by more than a little, but I remember that they at least offered up that little tidbit to improve plausibility. ---
**Author:** ![Bryan\_Ekers](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bryan_ekers/32/183_2.png) [@Bryan\_Ekers](https://boards.straightdope.com/u/Bryan_Ekers)\ **Post date:** [December 19, 2017, 4:07am UTC](https://boards.straightdope.com/t/explain-the-accounting-scam-in-the-accountant/804764/5 "2017-12-19T04:07:30Z")
I didn’t get the impression the accountant was a random hire. Doesn’t one of the characters describe him as a miracle worker before he gets started? I got the impression his reputation as an excellent forensic accountant was already well-known. The fact that he was also the Terminator, I’m willing to chalk up to coincidence. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [December 19, 2017, 4:44am UTC](https://boards.straightdope.com/t/explain-the-accounting-scam-in-the-accountant/804764/6 "2017-12-19T04:44:31Z")
> [@Bryan\_Ekers](#): > > The nature of the scam, and the revelation that the John Lithgow character (Lamar) is behind it, makes the movie more confusing, though. So one of the accountants, Dana, discovers a minor anomaly in the records and Lamar hires a legendary forensic accountant to audit the place, even though Lamar himself is the one cooking the books? Seems improbable - why not just eliminate (or distract) Dana and carry on? All he’s doing is creating problems for himself. Not just “legendary”. They hire the Keiser Soze of forensic accountants. As in a figure so mythical to law enforcement and organized crime that some don’t believe he actually exists. But Lithow’s company is a legitimate company, not a drug cartel. So in spite of what JK Simmons character said, they very much could hire Deloitte and Touche to do their forensic accounting. ---
**Author:** ![Bryan\_Ekers](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bryan_ekers/32/183_2.png) [@Bryan\_Ekers](https://boards.straightdope.com/u/Bryan_Ekers)\ **Post date:** [December 19, 2017, 5:19am UTC](https://boards.straightdope.com/t/explain-the-accounting-scam-in-the-accountant/804764/7 "2017-12-19T05:19:20Z")
> [@msmith537](#): > > But Lithow’s company is a legitimate company, not a drug cartel. Lithgow’s character seemed to have enough underworld connections to fill his house with mercenaries for the final act. Are hired goons also something one could pick out of the yellow pages? ---
**Author:** ![CookingWithGas](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cookingwithgas/32/485_2.png) [@CookingWithGas](https://boards.straightdope.com/u/CookingWithGas)\ **Post date:** [December 19, 2017, 2:26pm UTC](https://boards.straightdope.com/t/explain-the-accounting-scam-in-the-accountant/804764/8 "2017-12-19T14:26:00Z")
BTW I was surprised that Wolff made some vague hand-waving point about the embezzler creating unconscious patterns in the amounts he was booking, rather than using something proven and concrete but not commonly known like Benford’s Law. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [December 20, 2017, 9:00pm UTC](https://boards.straightdope.com/t/explain-the-accounting-scam-in-the-accountant/804764/9 "2017-12-20T21:00:55Z")
> [@Bryan\_Ekers](#): > > Lithgow’s character seemed to have enough underworld connections to fill his house with mercenaries for the final act. Are hired goons also something one could pick out of the yellow pages? I believe they prefer the term “private corporate security consultants”. ---
**Author:** ![Gatopescado](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gatopescado/32/5711_2.png) [@Gatopescado](https://boards.straightdope.com/u/Gatopescado)\ **Post date:** [December 21, 2017, 4:09am UTC](https://boards.straightdope.com/t/explain-the-accounting-scam-in-the-accountant/804764/10 "2017-12-21T04:09:55Z")
Highly silly movie.