Some Monday Morning Accounting Fun
And you people said accounting was boring. Where have you been?
There's Skeptical CPA going off on Enron accounting or the SEC or, well, who the hell knows what he's pissed off about, let's just say all of it and laugh along as everyone gets cussed out (he really doesn't like Floyd Norris for some reason):
This is nonsense FN. The rules look fine to me. Ask the SEC? Hahahah! See my 6 February 2008 post. Other investors absorbing .00111 of the losses was State Street's (SS) basis to avoid consolidating its conduits. Amazing! Where is the DOJ? Is it readying indictments? They should be easy to draft. The facts should be stipulated! The question: did SS and its employees believe what they said when they created those conduits? I ask: would SS make me an unsecured, non-recourse loan on say, a portfolio of stocks with .00111 down? If not, the convictions should be easily secured, the only issue being criminal intent. SS's 2007 proxy statement shows it paid Ernst & Young (E&Y) $12.5 million last year, including $7.9 million for its audit. I guess $7.9 million in audit fees doesn't go very far nowadays. Hey Mark Olson (MO) at PCAOB, what will you do about this? Anything? Of course not, unless Congress breaks your arm, after all as a "former" E&Y partner you must be a "West Side Story", 1956, character. I got it: beat up a dozen more small CPA firms, each of which audits less than say $1 billion in market cap of SEC registrants in lieu of looking at SS's conduit accounting. Does the PCAOB accept the new ".001 standard" for conduit non-consolidation? What is the PCAOB's position, or will it defer to the FASB to say .001 ain't enough?
K, that's old, you say? Well here is Professor Albrecht pwing our BS regulatory structure just yesterday on The Summa. Take that:
It is frustrating to be an accounting professor and to live in the United States of America. A mind set that triumphs the interests of corporations and auditors over those of investors is entrenched in the regulatory shadow. Consequently, any policies that might favor populist policies have little chance of success.
The federal government’s financial and economic regulatory apparatus is comprised of the Treasury Department (Treasury), the Federal Reserve (Fed), and the Securities and Exchange Commission (SEC). The top positions are political appointees, but the bulk of the work is performed by career and long-term personnel. It is a lot like the situation at the State Department (State), Department of Defense (DoD), and the National Security Agency (NSA).
In the same way that the politics and the communal mind-set of the career and long-term personnel shape national policies over at State-DoD -NSA, the politics of the career and long-term personnel shape national policies over at Treasury-Fed-SEC.
Read the rest at The Summa.
I applaud both opinions and will be expanding on Professor Albrecht's later today on Going Concern. Grrrrr.