Cook The Books

Meanings of “Cook The Books”

The phrase “cook the books” means to make twists and turns in the accounts of a company to avoid excessive or additional taxes.

Origin of “Cook The Books”

The phrase “cook the books” is stated to have been used during the 18th century. However, its printed usage appeared in The Adventures of Peregrine Pickle written by Tobias Smollett published in 1751. The phrase in this novel goes thus; Some falsified printed accounts, artfully cooked up, on purpose to mislead and deceive.” Later, the phrase was modified and appeared in its present shapes at the beginning of the 19th century despite its widespread use in the sense of cooking as well.

Examples in Literature

Example #1

It Pays to Cook the Books – Even When You Get Caught by Shivaram Rajgopal from Columbia Business School

This article is published on the website of Columbia Business School in response to the research of Shiva Rajgopal and Dan Amiram about the CEOs of different companies how they are involved in the financial misreporting to save the taxes. They are of the opinion that this misconduct on the part of the companies has been underway for since long. They have used the phrase several times as it has been used in this article published on the website, as it is related to the research.

Example #2

Cooking the Books by Anup Srivastava (from KellogInsight)

When the dot-com bubble of the late 1990s sent stock prices soaring, something else soared, too: CEOs’ perceptions of their net wealth. That theory alone may explain a large part of the psychology and behavior of why some corporate managers allowed their accounting books to get cooked.

This passage relates to the history of the internet and (commercial) .com websites. He says that when the internet increased, the salaries of the CEOs also increased. However, the tax collection did not increase with the same average which means that the CEOs were engaged in cooking the books. Therefore, the phrase has been used in its literal sense.

Example #3

Economics: Private and Public Choice By James Gwartney, Richard Stroup, Russell Sobel, David Macpherson

“Cooking the books” refers to the practice of using accounting procedure in an intentionally misleading way. By cooking the books, a corporation’s profits – or at least what appear to be its profits – can be increased. Stockholders are always looking for  shares of high-profit firms, so a recent record of high profits will increase the demand for the corporation’s stock shares and drive up their price. Cooking the books can be artificially encouraging to shareholders in the short term, but it can conceal problems and even lead to disaster in the long term.

This passage occurs in this book about economics. It defines it in economic terms, saying that it is an intentional practice and its major purpose is to mislead others into believing that actually worth of a company or a firm is not the same. This saves taxes for the firms and the managers.

Example in Sentences

Example #1: “Cooking the books is not an easy job for him; first he has to establish his credibility in the eyes of the tax officials, and they consider him about cooking the books, for cooking the books is not his field.”

Example #2: “Roland has not come here to not to cook the books, said the manager. He prefers to be honest and pay his taxes.”

Example #3: “When passing through the city, he firmly comes to know about his firm and enters the office to cook the books. As soon as he sees others sitting, he immediately senses some danger and leaves the office but returns and starts in the face of the person sitting on his chair.”

Example #4: “When he saw his brother at home sleeping, he starts extolling his heroics in the house. He mentions all of his exploits, his care for others, and his sacrifices, leaving all other exploits to one side and his act of cooking the books on the other.”

Example #5: “They have reached the confusion after much brooding that cooking the books may not solve the matter. What is going to solve the matter for them is book the cooks and then engage them in setting the accounts.”