Accounting Is a Sewer
...at least according to Berkshire Hathaway vice chairman Charlie Munger:
[A] majority of the horrors we faced would not have happened if the accounting profession were organized properly.
“In other words, [the accountants] have a position from which, if they behaved intelligently and correctly, they could prevent a huge amount of all that’s wrong with the system. And they fail utterly, time after time, after time.
“And they are way too liberal in providing the kind of accounting the financial promoters want. They have sold out and they do not even realise that they’ve sold out … Compared to what could reasonably be with intelligence and honour, the accounting profession is a sewer.”
I'd pretend to be offended but he's not saying anything I haven't already said and/or thought. Case in point, this nonsense with Andrew Cuomo taking on big bad Uncle Ernie over E&Y's epic Lehman failure. You think the auditors are actually there to find and expose fraud? Oh my dear, sweet, ignorant reader, if that's the case, how on Earth are the Big 87654 going to earn their fees? And if that's the case, why are the ones actually doing the audits the kids fresh out of counting school? It's all a very complicated and very expensive production intended solely to create the illusion of confidence in an entity's financial condition and not at all based in reality.
The cheerleaders don't need financial statements they can use, they need an accounting standard that allows for the most confusion, interpretation and general nonsense.
They've got it.