Accounting Scandals

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Can we get Sarbanes and Oxley to look into this [PDF], from a statement today by the Comptroller of the U.S.?

As in the 6 previous fiscal years, certain material weaknesses1 in internal control and in selected accounting and reporting practices resulted in conditions that continued to prevent us from being able to provide the Congress and American citizens an opinion as to whether the consolidated financial statements of the U.S. government are fairly stated in conformity with U.S. generally accepted accounting principles (GAAP).

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  1. Dang, that’s bad.

  2. For all the criticism of Enron, Worldcom and the like, the accounting practices of the US government put them to shame.

  3. Before the Bush-bashing begins, this is of course a long-standing problem. Maybe an insoluable one, as well. Standard accounting practice for ALL of the federal government may be unachievable.

  4. Why Don`t they hire Authur Anderson for
    some creative accounting.They can balance
    a 6 penny finishing nail on a greased marble.

  5. “certain material weaknesses in internal control and in selected accounting and reporting practices resulted in conditions that continued to prevent us from being able to provide the Congress and American citizens an opinion”

    Does the Guiness Book of World Records have a category for understatement?

  6. Generally accepted accounting practices don’t exactly apply. The fallacy of composition takes over. The government is too big to account for. (For instance, the government can’t save, where any individual can.)

  7. Ron Hardin –

    If Generally Accepted Accounting Principles (GAAP) “don’t exactly apply”, then why does the opening sentence of the opening paragraph of the GAO report state the quote that Julian posted above? (If you go to the PDF file and look at the report, it is the opening paragraph.)

  8. Remind me why the government hires so many accountants again?

    So that they get better at taking your money and wasting it on boondoggles. You could probably have placed this report in any presidency that has been or is yet to come. The numbers would change but the theme remains the same: they are lying to you and stealing from you. They cook the books, then chase after Martha Stewart, then cook the books some more.

    Check out page 6 (and Appendix III) of the report. It almost made me cry: The federal government could not satisfactorily determine that all PP&E and inventories and related property were included in the consolidated
    financial statements, verify that certain reported assets actually exist, or
    substantiate the amounts at which they were valued.

    Translation: We don’t know what we have, where we have it, whether it was sold, or how much it’s worth.

    Kind of puts what you think they do know in perspective, don’t it?

  9. just as we all suspected, our national finances are totally out of comptrol.

  10. “You want the truth?”

    “You can’t handle the truth”

  11. Wonderful. So they don’t know how much money they actually had, or where it went. Nor have they even had a plausable lie for 7 years. Remind me why the government hires so many accountants again?

  12. Jim, so that it looks like they’re ‘doing something’ about it.

  13. Are you telling me Sarbanes hasn’t bored himself to death yet?

  14. …and these are the guys who impose a half-billion dollar fine on WorldCom? As bad as Enron’s blow-out may have been, none of us were forced to invest in Enron. But we’re all throwing money at AMTRAK.

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