cooking the books investment & finance definition

A slang term that means illegally falsifying financial statements. A company may try to cook the books in order to hide a loss, a drop-off in sales, or a liability that it doesn’t want to disclose; in order to protect the share price from falling; or to keep creditors from demanding additional collateral or the immediate repayment of loans. It also may be done in order to decrease the amount of income tax that the company has to pay.