[_Jim]

This arose coincident with the switch to major mainframe computers which changed so-called balance sheet auditing to systems testing and compliance

I find it extremely hard to believe that they weren't using something as fault-tolerant, reliable and with the support and backing that Big Blue provides from the VERY start of their operations including their 'trading' ops ...

[masadaman]

Balance sheet auditing properly done focuses on the cash generating ability of so-called assets and the likelihood of unrecorded liabilities. Big Blue's systems controls are effective at yielding numbers accurately and rapidly, but to date have not produced answers to questions such as "Should this asset be written off?

Take Enron, "partnership investments" apparently were not marked to market. Potential liabilities, guarantees, and security interests apparently were not considered as a part of that evaluation process even if it took place. Computers cannot not yet take on such questions. Computers cannot yet also cope with the issues of disclosure, aggregation and comparability.

The jabbering nonsense about complexities among the analysts, employees and the media re Enron turns my stomach. There has been accounting theory and practice for reporting on trading, trading futures,unrecognized gains and losses, unrecorded liabilities,etc. since caravans plied the Orient. Pacioli said as much and he is the father of modern accounting.

Further just within the United States, there are 20 or more commodities, options and futures regulatory boards dealing with such matters. Investment banks, commercial banks of size, mortgage banks, currency traders, commodities dealers and traders of precious metals, foodstuffs, oil,cotton, timber even TV time deal with such variables every day and the accounting methods are usually very reliable.