Window-dressing is the practice of presenting data in a different manner so as to give the impression that the state of a company is better than it really is. In other words, window-dressing is a way of choosing to emphasize the good points and maybe presenting them as more important than they really are, with the aim of overlooking the negative aspects. Window-dressing may not exactly be illegal, but it definitely involves deception and can have negative consequences.
Window-dressing can be done at any time during the financial year. Whenever a report or presentation is needed, window-dressing can be employed. More often than not, however, window-dressing is carried out when the accounting period ends. The goal is for the company to look better than it actually is.
It is important to understand that window-dressing is not all about presenting lies and fabricating data. As a matter of fact, the act of window-dressing draws upon real data that can be confirmed. The deception lies in the weight that is given to the positive aspects of the company’s financial status. These aspects are highlighted while the negative points are ignored or downplayed.
Quite obviously, window-dressing can be beneficial to the company especially if it is engaging in an endeavor such as attracting new investors or customers. Giving the impression that the company is doing well - beyond the actual performance - will always bode well for the company. However, these things do have a tendency of coming out sooner or later, and when they do, the company will not be looked upon kindly.