Banks Seek Power to Fudge the Books

Just another sign that we are sliding into the abyss.

Astonishingly, at a time when the public is crying out for greater regulation to limit excessive risk-taking by financial institutions, the banks are trying to get Congress to agree that the next time there's a big downturn, they should have the ability to alter their accounting standards -- essentially, fudge the numbers -- so that the public and investors won't be able to tell how insolvent they really are. By ignoring their declining asset values, they can avoid the standard requirement of raising more capital.



Read more at: www.huffingtonpost.com...&cp

and THEY WILL GET it or should i say pay off lawmakers and then legally get the power fudge.

financial lobbyists come to congress with checks in hand to write the laws in their favor

congressmen can then pay for commercials that win voters over with this money

Their is no voice that gets HEARD among congressmen or media FOR THE PEOPLE .....game set match.

Should people go hungry then their might be a revolt.....but the public will be outsmarted byintelligence propoganda that would front run any hunger problem

There is a lot of change coming down with regards to Accounting standards in the US. You probably know that in the US, Accounting standards are GAAP rules based. With the possibility looming/likely that the US will transition to International Accounting standards (it was supposed to be in place by 2011 but has now been pushed to 2014, some say a bit later) that changes the Financial Accounting game in some big ways. Primarily, because IAS is Principles based, not Rules based (not GAAP)... so more flexibility...

Here's an opinion article/interview, it's not detailed, but offers some basics to think about.
an opinion

A good article on rules based vs principles based Accounting procedures
CPA Journal

Aren't the banks just asking to use the same accounting principles the government uses?

IMO, fuzzy math has been the name of the game for quite a while.

Otherwise Maddoff, Enron, failing banks and mortgage companies number game would have been discovered from day one.

The thing is, there are many different Accounting options to use, but a company is not supposed to change those options often... most don't ever. Yes, whichever option a business uses can make a difference to bottom line (is the concern income taxes, is it something else, what is being measured at the end of the year?) If I understand this right, the banks are advocating the ability to change the Accounting method used, depending on the economic situation... this can be very bad.

Right now, the ability to change a current method is generally based on bringing a business into industry standards (ensuring that one company is using the same method as another in the same industry) it allows for comparison. These methods don't change often because if they are allowed to change at whim, than massive fraud could be buried and the public would not ever be given a clear picture of business activity. It would also eliminate the ability to compare across sectors and across time.

ETA: not to suggest that fraud doesn't continue to happen... shall we talk SEC failures... (grrrr)



[edit on 6-11-2009 by LadySkadi]

INSIDE INFO

they already fudged

BOFA tapped Theoretical physicist student to form a small team of Brown alum's to re create their books in early 2008...

If someone was minding the store -

the SEC ... dropped the proverbial ball, big time ...


[edit on 6-11-2009 by LadySkadi]

who is who - where does one begin and one end?

thats problem #1 IMO