Charles Mulford knows accounting … really well. Mulford along with his colleague Eugene Comiskey, professor and associate dean of Faculty and Research in the College of Management, have collaborated on several books about accounting. Their third book, The Financial Numbers Game: Detecting Creative Accounting Practices (January 2002), happened to time the market just right; it was published just as the Enron scandal was hitting the news, causing a ripple effect throughout the investment and corporate community. Sales of their book skyrocketed, and national attention rose as reporters, money managers and financial analysts began calling for analysis and information.
Later that year, Mulford established the Financial Reporting and Analysis Lab in the College of Management, the business school at Georgia Tech, to provide unbiased stock market research, which he saw as lacking in the investment industry. The Lab reports regularly on a variety of issues of interest to stock market participants, including corporate financial reporting practices, measures of cash flow, earnings, and the like.
The Financial Reporting and Analysis Lab is credited with bringing the Securities and Exchange Commission’s (SEC) attention to some questionable tactics by dozens of companies, including General Motors Corp. and Ford Motor Co., in how they treat customer-related loans. In April 2004, the Lab issued a report criticizing these companies for improperly boosting their cash flow reports by treating customer-related loans as an “investing” activity instead of an “operating” one. In January 2005, the SEC responded to this report and asked companies to correct this classification.
Mulford and the Lab’s reports are cited regularly by the Wall Street Journal, Washington Post, Business Week, Financial Times, Fortune, CFO Magazine and others. Mulford and Comiskey’s newest book, Creative Cash Flow Reporting: Uncovering Sustainable Financial Performance, was published in January 2005.