Free Republic

It took just five weeks after the WorldCom accounting scandal erupted in 2002 for Congress to pass, and President George W. Bush to sign, the Sarbanes-Oxley Act. That... --snip-- The House Financial Services Committee this week approved an amendment to the Investor Protection Act of 2009 — a name George Orwell would appreciate — to allow most companies to never comply with the law, and mandating a study to see whether it would be a good idea to exempt additional ones as well. Some veterans of past reform efforts were left sputtering with rage. “That the Democratic Party is the...

Four thousand years ago, a government bureaucrat in Mesopotamia jotted down a tally of slave laborers on a clay tablet. The bureaucrat left behind the count in wedge-shaped symbols that proved hard to fully decipher with the naked eye. Until now. Researchers at the University of Southern California's West Semitic Research Project have helped uncover its hidden narrative with the aid of lighting and imaging techniques that are credited with revolutionizing the study of ancient texts. Over the last three decades, the USC project has produced thousands of crisp images of inscriptions and other artifacts from biblical Israel and other...

Vast Cache of Financial Papers Is Rich in Details One day in 1791, President George Washington received a bill for 60 pounds, 1 shilling and 7 pence from his physician friend James Craik, who regularly made the rounds at Mount Vernon. The invoice ran two pages: "Anodyne Pills for Breachy . . . Laxative Pills for Ruth . . . syphilic Pills for Maria . . . oz 1 Antiphlogistie Anodyne Tincture . . . Bleeding Charlotte . . . oz 4 Powdered Rhubarb . . . Extracting one of your Negroes tooth . . . a Mercurial Purge for...

The bankruptcy of Colonial Bank (CNB) was the largest bank-bankruptcy in the U.S. since several large, U.S. financial institutions collapsed last year – with the most recent being Washington Mutual, last fall. However, there is one huge difference between the mega-bankruptcies of last year and the collapse of Colonial Bank a week ago. During the large bank-failures of 2008, the acquiring institutions wrote-down the “assets” on the books of these banks by an average of 18% - according to a Bloomberg article. However, when BB&T Corp purchased Colonial, it immediately wrote-down Colonial's assets by 37%, double the amount of discounting...

Mr. Obama urged all citizens to go to his web site and see how the stimulus dollars are being spent. So I did. It's really not very informative, but I'm trying to see what may be actually accomplished by the money our congress is doling out.

Even beleaguered Ford Motors has found it easy to "make" money once again. It reported a $2.3 billion second-quarter profit...

If the government wants to spend money on a program — presuming it’s unwilling to simply roll the printing presses — it must choose between two ways of acquiring the needed funds. It can borrow the money, or it can raise it through taxation. Neither source is ideal. The disadvantage of raising taxes is obvious. The disadvantage of borrowing stems from markets taking notice, and — if you do it often and irresponsibly enough — punishing you for it.

The board that sets U.S. accounting standards on Thursday gave companies more leeway when valuing assets, providing a potential boost to battered banks' balance sheets. The independent Financial Accounting Standards Board voted to adopt new guidelines under the so-called mark-to-market accounting rules, which require companies to value assets at prices reflecting current market conditions. The board was meeting at its headquarters in Norwalk, Conn. The changes will allow the assets to be valued at what they would go for in an "orderly" sale, as opposed to a forced or distressed sale. The new guidelines will apply to the second quarter...

Accounting: a Narrative Art? If U.S. GAAP becomes principles-based, financial executives would do well to become students of Mother Goose. David M. Katz - CFO.com | US March 13, 2009 The move to a principles-based accounting system is likely to demand that corporate finance executives be good yarn-spinners, speakers at the annual CFO Rising conference said. A system less like the rules-based U.S. generally accepted accounting principles (GAAP) and more like the judgment-focused international financial reporting standards (IFRS) would draw more heavily on the narrative skills of finance executives, according to David Sherman, a professor of accounting at Northeastern University....

Top US lawmakers said Thursday that Congress would take action if accounting regulators and rulemakers failed to quickly improve the mark-to-market accounting standard that has forced banks to record billions of dollars in asset writedowns. "If the regulators and standard setters do not act now to improve the standards, then the Congress will have no other option than to act itself," Paul Kanjorski, the chairman of the US House capital markets subcommittee, told a hearing he called to examine the accounting standard. The Financial Accounting Standards Board is working on new guidance to help banks determine whether a market is...

We have been accused of beating a dead horse when it comes to our support for either suspension of, or targeted relief from, market-to-market accounting. And we suppose after writing thousands of words, producing videos and giving speeches about the issue, some might be tempted to let it go. But we can't do that, especially when the government continues to spend trillions of dollars and is coming very close to bank nationalization. Article Controls email print reprint newsletter comments (59) share del.icio.us Digg It! yahoo Facebook rss Yahoo! BuzzThis is a real shame. Suspending mark-to-market accounting could fix major problems...

China's Accounting: The Next Debacle? Speaking of China, I’m going to tell you now, long before all the media experts tell you that - THEY – “told you so first”. China is a ticking ACCOUNTING time bomb. You think we’ve had accounting scandals, wait till you get a load of China. Within the next few months to a year, sagacious media “experts” will be telling you

The odds 10,000 to 1 are not good for the public's financial health. Every one of the well-known debacle companies had CPA auditors who said the financial statements were just fine. For AIG it was PricewaterhouseCoopers. Lehman Brothers (the largest bankruptcy in American history) had Ernst & Young. Fannie Mae's fiascos were OK'd by Deloitte & Touche. KPMG was responsible for Countrywide. The $50 billion Madoff Ponzi scheme somehow could not be detected by numerous CPA auditors for its investors. Is the loss to the investing public $1 trillion, $2 trillion, or more? How many life savings are destroyed? How...

Bankers who've been seeking Congress’ help to suspend "mark to market" accounting rules lost a battle today: The staff of the Securities and Exchange Commission recommended in a report that mark-to-market rules should be maintained, although "improved." The report had been ordered up by Congress in October as part of the financial-system bailout. The banking industry asserts that mark-to-market, or fair-value, accounting worsened the financial crisis. The rules require require financial institutions to value securities on their books at current market prices, even if the securities don't mature for many years.

Why are the Pharisees of Accounting in the U.S. trying so hard to destroy American business? Having crippled high tech entrepreneurship and made it nearly impossible for any U.S. company to ‘go public’, the people who set the rules of financial disclosure are now making corporate financials so obscure that investors literally have no way of knowing the financial condition of their companies.

To a supporter of capitalism and free markets, the current debate over a Treasury Department proposal for a $700 billion fund to purchase illiquid assets, is troubling on many fronts. First, a temporary and targeted change in mark-tomarket accounting rules could help solve the current financial market problems at much lower cost. But this alternative has been dismissed with very little in the way of debate. Second, when the public hears that the government must save the economy from capitalism run amok, it loses faith in our free market system. In other words, the huge Treasury proposal has accelerated the...

The credit meltdown has spawned a few false villains, and one is “mark-to-market” accounting. Too many observers—including Congress’s Republican Study Committee—think that if we just suspend the accounting rule that requires financial firms to report certain investments at fair market value, then the crisis will go away. But accounting isn’t the culprit here.

Economist Wesbury is saying that if we change that one rule and don't force them to mark down to market value and just let them hold on to all the stuff, and say just on sub-primes for this period of time you can change that rule -- a temporary change -- that'll free the market up. It's seized right now; it's frozen. This will thaw it out and get it going again. He says that'll solve 60% of the problem ... and I think he's right.

FASB Votes To Remove QSPE Concept From FAS 140, FIN 46R Yesterday (April 2, 2008), FASB voted to remove the Qualified Special Purpose Entity (QSPE) concept (used for some securitizations) from FAS 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, and to remove the related scope exception from FIN 46R, Consolidation of Variable Interest Entities (VIEs). In addition to removing the QSPE concept, the board also approved amendments to the derecognition criteria in paragraph 9 of FAS 140 (changes shown in redline form on pages 1-2 of the board handout), and agreed to provide guidance...

In a sweeping accusation against one of the country’s largest accounting firms, an investigator released a report on Wednesday that said “improper and imprudent practices” by a once high-flying mortgage company were condoned and enabled by its auditors. KPMG, one of the Big Four accounting firms, endorsed a move by New Century Financial, a failed mortgage company, to change its accounting practices in a way that allowed the lender to report a profit, rather than a loss, at the height of the housing boom, an independent report commissioned by a division of the Justice Department concluded. The result of a...

Senior executives of the Texas Department of Transportation can expect some heavy grilling from state legislators when the state Legislature convenes next January, state Rep. Jim McReynolds said Friday. Speaking to the monthly First Friday luncheon of The Chamber, Lufkin-Angelina County, McReynolds said many legislators, especially those from rural East Texas, are unhappy with TxDOT leaders over the Trans- Texas Corridor project and how it has incorporated plans for an Interstate 69 through the region. McReynolds said he attended all four of the TxDOT hearings on the TTC held in his district, which included one in Diboll, and "never heard...

ALGORITHMS sound scary, of interest only to dome-headed mathematicians. In fact they have become the instruction manuals for a host of routine consumer transactions. Browse for a book on Amazon.com and algorithms generate recommendations for other titles to buy. Buy a copy and they help a logistics firm to decide on the best delivery route. Ring to check your order's progress and more algorithms spring into action to determine the quickest connection to and through a call-centre. From analysing credit-card transactions to deciding how to stack supermarket shelves, algorithms now underpin a large amount of everyday life. Their pervasiveness reflects...

But complaints fell on deaf ears, ex-employee says. Michelle Cawthra, the state tax department supervisor accused of stealing $10 million of public funds, was abusive and demeaning to subordinates for years, according to a worker who quit over what he called her "dysfunctional management." But despite employees' repeated complaints to top management, Cawthra seemed untouchable, James McClarnon said. "The management of Michelle Cawthra and (her boss) Janet Swaney has made Income Tax Accounting into the most dysfunctional section I have ever worked in," McClarnon, 49, wrote in an exit interview. McClarnon, a tax supervisor who reported to Cawthra, quit March...

The company said after U.S. markets closed that an audit panel had found accounting errors and evidence of misconduct. Dell also said it will delay filing its Form 10-K until it has completed an internal investigation.

According to Gov. Arnold Schwarzenegger, California's financial condition is "fantastic." Spending has been brought under control, the budget has been balanced, and our debt is being paid down. ... --snip-- ... In fact, spending is growing faster than it did under his recalled predecessor, Gray Davis. The state is now running the biggest deficit in its history, and the only way it can pay its bills is because of massive borrowing carried over from 2004, ... --snip-- The governor justifies his claim that the budget is balanced by concocting a new accounting concept he calls the "net operating deficit." Here's...

Like many other baseball fans, Joe Kosa, 28, is spending his Sunday glued to a TV. But relaxed he's not. Instead, the ESPN (NYSE:DIS - News) production assistant is stationed in front of dozens of flat-screen TVs tuned to global sporting events at the headquarters of the Disney-owned network. He's furiously jotting down notes to weave into a storyline that will be read in 60 seconds flat on tonight's 6 p.m. SportsCenter broadcast. With the San Diego Padres leading the Chicago Cubs 9-0, the outcome is hardly in doubt, and writing the highlights should be easy. Then, Clay Hensley, who...

Budget analysts changed employee time cards to allow the San Diego City Attorney's Office to funnel extra money from lucrative special city accounts, according to results of an internal investigation released yesterday. City Attorney Michael Aguirre said the improper accounting, which took place from 1997 to 2004, included time cards being altered to reflect work for the wrong department, and part-time work billed as full-time. Questionable billing of other city departments continued in his office through this week, Aguirre acknowledged, even though he said he put new policies in place to stop the activities within a month after he took...

Senator's Lieberman's troubled campaign and recent steps to possibly run as an independent have frequently been topics of discussion lately. I don't care which Democrat win the primary in CT in large part because I don't live there. For years liberals blamed Enron, Worldcom and other business scandals on President Bush. People neglected years ago and even more recently during the race in CT the fact that Lieberman led the charge to fight attemps to bar the controversial practice of barring auditing firms from billing corporations for high priced consulting which in many cases translated to the auditing firms turning...

Blaming every other company in the U.S. for the Enron and WorldCom scandals has been a bonanza for accountants and a killer for small companies especially. Congress need to correct a very bad law. To address reform of the Sarbanes-Oxley Act of 2002 (Sarb-Ox), recall that it was passed in the political furor following the Enron and WorldCom scandals to try to prevent future accounting frauds. Let's start with its most obvious, largely unintended, consequences. Sarb-Ox, with its notorious Section 404 requiring internal control certifications in particular, has created a tremendously expensive amount of paperwork and bureaucracy. In the Sarb-Ox...

Startling facts from the recent Federal Reserve Board's Survey of Consumer Finances indicate that the typical American family has about $3,800 in the bank, no retirement account, no mutual funds and no stocks or bonds. Financial planners suggest families do the following to avoid financial ... http://www.financialfitnessohio.com/Main.aspx?MenuItem=580 http://www.federalreserve.gov/pubs/bulletin/2006/financesurvey.pdf

For at least the past 30 years protectionists have warned that the trade deficit will lead to ruin, but . . . Since the mid-1980s the trade deficit has risen when the economy has grown and receded when the economy has faltered . . . . . . In the national income accounts, the mirror image of a merchandise trade deficit is a capital import surplus. When the U.S. investment climate improves - through such policies as reducing the tax rate on capital gains - global investment dollars flow into the U.S. Foreigners in turn earn the dollars to pay...

Motley Fool A Dubious Sign of the Times Tuesday March 7, 3:17 pm ET By Tim Beyers I've long wanted to own stock in New York Times (NYSE: NYT - News) for several reasons. I love the paper. I'm a big fan of About.com. And then there's sentimental angle: I'm a New York native. But there's one big reason why I'm not buying the stock. A check of the proxy statement filed with the Securities and Exchange Commission (SEC) on Friday reveals that chairman Arthur Sulzberger Jr. and CEO Janet Robinson both received hefty bonuses despite meeting less than 60%...

Exclusive Ernst and Young should go ahead and pony up for its own suite of transparency services. The accounting firm has failed to disclose a high profile loss of customer data after being confronted by The Register. Ernst and Young has lost a laptop containing data such as the social security numbers of its customers. One of the people affected by the data loss appears to be Sun Microsystems CEO Scott McNealy, who was notified that his social security number and personal information have been compromised. While pushing all out transparency for its customers, Ernst and Young failed to...

WASHINGTON — An extensive investigation of embattled Fannie Mae (FNM) points to its former finance chief and controller as mainly responsible for the accounting failures at the mortgage giant now struggling to emerge from an $11 billion scandal, said a report released Thursday. The report by a team of investigators led by former Sen. Warren Rudman also found that former chairman and CEO Franklin Raines, while not sharing direct responsibility, contributed to a culture of arrogance at the government-sponsored company. The report comes about 17 months after the revelation that federal regulators had discovered violations of accounting rules and earnings...

The allegations against former Enron Corp. chairman Kenneth Lay and others involved in corporate scandals, such as WorldCom, generally revolve about creative accounting - hiding liabilities, inflating revenues and assets, etc. One specific charge in the Enron trial now under way in Houston, for example, is that it cooked the books one year to add a penny to the company's per-share earnings and thus meet Wall Street analysts' expectations. What's striking about the allegedly illegal corporate accounting is its similarity to the gimmicks that California politicians have employed in two state budget crises over the past 15 years. --snip-- Here's...

The word "reinvent" is a dumb term, having an overtone of redundancy. After all, when you have invented something, it exists. You can revise it or change it, but you can't "reinvent" it after you have already invented it. I never heard the term when I first entered the workforce. But somewhere in the 1970s or so, corporate executives-began using the word, and using it a lot. Then as now, the nation had its usual economic ups and downs, but suddenly after one downturn, our nation was heavily laden with companies that had reinvented themselves. What happened is that after...

KPMG avoided the fate of Arthur Andersen yesterday... over the marketing and sale of "abusive" tax shelters. But the price of survival was high. The accounting firm will pay $456 million in fines and restitution and has agreed to let a federal monitor look over its shoulder. At the same time, no fewer than eight former KPMG executives and an outside lawyer were indicted on conspiracy charges for designing and selling the shelters.... KPMG will survive this "deferred prosecution" by admitting wrongdoing. But it's easy to forget amid the righteous indignation over tax shelters with names like FLIP, BLIP, OPIS...

Do concerns about the financial stability of the Agricultural Hall of Fame keep you up at night? How about gnawing curiosity about the profitability of Amtrak food and beverage services? Be not afraid! The Government Accountability Office is on the job! Whatever your favorite nook or cranny of the federal government, the GAO is there, issuing comprehensive reports on it, such as "The Financial Statement Audit Report for the Agricultural Hall of Fame for 2001 and 2000" and "Amtrak: Management and Accountability Issues Contribute to Unprofitability of Food and Beverage Service" (take a look for yourself). Since 1921, the gnomes...

While I don't always agree with fellow FReepers, I always respect the trustworthy information I can find here. Having said that, I need to pick a software package for a small business. The business is exclusively "Land development." and must track Purchase price of land Cost of all improvements, Sale price of land. Actual profit realized Miscellaneous expenses Which is a better software package for this: PeachTree or Quickbooks.

If you spent more each month than you made and got deeper and deeper into debt, but had an asset equal to your debts, like a big expensive boat you never used, what would you do? If you were rational, you would sell the boat. The U.S. government has spent more than it receives in tax revenue for most of the last 75 years, and, as a result, the national debt and the associated interest payments have gotten bigger and bigger. But what is not well known is that the U.S. government also has many trillions of dollars of assets,...

By GAO (Government Accounting Office) estimates the "prescription drug benefit" program INCREASED BY 26% IN 2004, all historically accumulated, future spending obligations and committments of the U.S., including SS, Medicare, vet benefits, etc., accumulated throughout U.S. history, since before Roosvelt. http://www.babylontoday.com/#gao_financial The prescription drug benefit is the 8.1 trillion dollar portion, of the 13 trillion dollar increase, to a total 43 trillion, of current U.S. future spending obligation. But don't worry, according to the GAO, that only represents a $350,000 obligation per full-time worker in the U.S., SO FAR! But sadly the following demonstrates that the spending will be much...

China's boom has not led to wholesale change By Joe Studwell, editor-in-chief of the China Economic Quarterly Published: April 3 2005 20:24 | Last updated: April 3 2005 20:24 As China's economy shows signs of a modest slowdown from annual growth officially reported at more than 9 per cent in 2003 and 2004 - but which physical indicators suggest probably exceeded 10 per cent - it is time to ask whether this latest "China boom" has been qualitatively different from previous ones. Those who believe China is continuing its march away from a state-driven economy cite hard evidence. The efficiencies...

Since 2000, the nonprofit Martin Luther King Jr. Center in Atlanta has paid aMLt least $2.9 million to a for-profit business run by Dexter King, the younger son of the late civil rights leader. The payments to Intellectual Properties Management escalated sharply in that time, the center's tax records show. By 2003, more than 50 cents of every dollar donated to the center was passed on to IPM, making it the center's largest single contractor, records show. Dexter King served as chief executive of both organizations in 2002 and 2003. A company document obtained by The Atlanta Journal-Constitution says the...

SACRAMENTO (AP) - A defunct state agency that distributed federal crime grants was so plagued with accounting problems that it was impossible to audit and tens of millions of dollars in future funds could be in jeopardy, state auditors said Wednesday. Auditors looking into the Office of Criminal Justice Planning found incomplete and inaccurate paperwork a year after the agency was abolished because of leadership problems and poor business practices. "In my 30 years experience, this is the worst thing I've ever seen," said Samuel Hull, chief of state audits. "When we got into there and started looking at things...

Dec 13, 2004 (financialwire.net via COMTEX) -- (FinancialWire) Dell (DELL) CEO Kevin B. Rollins, Home Depot (HD) CEO Robert Nardelli, Time Warner (TWX) CEO Richard Parsons and hundreds of business executives have been summoned to a two-day confab with President Bush, Vice President Cheney and the returning Secretary of the Treasury John Snow, himself a former CEO, at CSX Corp. (CSX). The president wants to focus on capping lawsuit damages, Social Security reform and simplification of the tax code. --snip-- The confab, however, does not appear to include representatives of small public corporations where the unproportional costs of Sarbanes-Oxley are...

Time Warner Inc., the world's largest media company, reported an 8 percent decline in third-quarter earnings Wednesday and set aside a $500 million reserve in anticipation of settling government investigations into its bookkeeping. The company said it would restate earnings for 2000 and 2001 to correct its accounting for AOL Europe. The moves put the company a step closer to resolving the investigations, which have caused anxiety among investors after dragging on for more than two years. The Securities and Exchange Commission and the Department of Justice are still investigating accounting practices at America Online, including its advertising arrangements and...

Bob Dole Slams Kerry By Andrew L. Jaffee, August 23, 2004 Home   Search   Forum   Terms Nothing has really changed for Democratic hopeful John Kerry, except that real war veterans, like Bob Dole, are questioning the “superficial wounds” and resulting “medals” he received during four (4) months service in Vietnam. Kerry is still flailing, trying to cover up a career punctuated by extreme left-wing politics and flip-flopping by talking to voters about his military service. He squandered his acceptance speech at the Democratic National Convention by trying to convince Americans that his tour of duty in Vietnam will make him a great commander...

Red Hat announced Tuesday it is restating earnings going back to 2002, as the company changes the way it accounts for subscription revenue. The Linux company, which recently reported the resignation of its chief financial officer, said it made the decision to change its revenue recognition after discussions last month with its independent auditors, PricewaterhouseCoopers.

Ken Lay of Enron Indicted and Arrested By Andrew L. Jaffee, July 8, 2004 Home   Search   Forum   Terms Enron’s ex-Chairman of the Board has been indicted and arrested on charges connected with his former company’s implosion in 2001. Corporate executives at Enron engaged in all sorts of financial manipulations to pump up the company’s stock price. They created complex “partnerships” to hide company debt from shareholders. In 1998, Enron’s share price was at about $20. By 2000, it hit $90. By 2001, the company’s stock was worthless. Enron’s collapse wiped out billions in shareholder value and employee pensions. Democratic Presidential hopeful John...

An investigation into the biggest corruption scandal in the history of the United Nations is being hampered by the US-led administration in Iraq, according to congressmen and officials in Baghdad. Serious reservations have been raised over the appointment of auditors Ernst & Young to investigate the disappearance of billions of pounds under the UN oil-for-food programme