Vive Le Canada

Accounting - Scam or Fraud ?
Date: Thursday, December 11 2003
Topic:


This should get some attention.

I have studied basic bookkeeping as well as basic accounting. I fear that there are some accountants and accounting firms that become so creative, they make it almost impossible to follow the paper trail.

The problem is, that is exactly what they are being paid to do.



Bookkeeping is easy, double-entry, debits and credits. They MUST balance.

Accounting takes 4 or 5 years to learn at university, and they teach nothing more than the manipulation of numbers.

Enron ring a bell ?? Accounting did that.

Think about this: Company A buys Company B; they takeover Comany C; they purchase one or two more companies; they become a conglomerate of 10, 20, 30 or more companies.

Then they start buying and selling from and to each other, inflating the cash flow figure, making it look like these companies are more profitable than they really are, and that makes them look good to investors. I call this "circular accounting".

Some of these conglomerates have enough income to keep this scam working, and if they have a good product, then who should care ?

That's the problem - we should all care. This is manipulation at it's finest, (or worst) depending on where you are sitting.

I am not saying accounting doesn't have its place, but it is so easily corrupted.

It is conceivable that out of all the companies in North America, they could be owned by only a handful of people. How could we possibly trace the ownership through all the paper trails they leave behind ?

You can put 5 accountants in the same room, give them the same company numbers to work on, and they will come up with different answers. That is what they mean by "Sharpen your pencils". They mean "Get creative". Make it work, and fudge the numbers, make them meaningless to the outsider.

I feel very strongly that the only way to real wealth is through accounting, except for some certain circumstances.

We should not allow the concentration of power by allowing these corporate hives to operate with no real controls.

I would hate to be the Auditor General and try to make sense out of a mess the accountants have put together to make the real issue so cloudy you can't come to a real decision.

A good guess is the best answer you can get from such manipulation.

I don't know the answer, but the way it's going, we'll know pretty soon. Maybe too late, but pretty soon.

This is not meant to offend accountants in general, just the ones that know who I'm talking about.









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