Funds held in reserve but not disclosed on the balance sheet, often referred to as off-balance-sheet reserves or secret reserves. Used historically within some UK banking institutions, these reserves are now effectively prohibited due to their potential for earnings manipulation and lack of transparency.
The Waste Management scandal was an egregious example of accounting fraud in which top executives manipulated financial statements to meet earnings targets. Spanning over five years from 1992 to 1997, this deceitful practice was eventually uncovered, resulting in significant financial restatements and legal consequences for both the company and its auditors.
