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Cases of backdating employee stock options have drawn public and media attention.

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Most smooth talking salesmen from the dealership have experience with convincing buyers to sign a backdating contract with many valid reasons to change the date.In 1972, a new revision (APB 25) in accounting rules resulted in the ability of any company to avoid having to report executive incomes as an expense to their shareholders if the income resulted from an issuance of “at the money” stock options.In essence, the revision enabled companies to increase executive compensation without informing their shareholders if the compensation was in the form of stock options contracts that would only become valuable if the underlying stock price were to increase at a later time.Sure the accounting rules are arcane and most people don't know them.But if someone asks you to write down a date from a month ago on a legal document, rather than today's date, doesn't it give you pause?




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