I've read some postings here, and I think that the parable of the poor widow is close, but not quite on mark. There is another parable where Jesus points out that a person that gives something to charity in a public way to engender the praise and accolades of others has *already* received just reward for the charity. Hence, the act will not be looked favorably upon by the Big Guy.
He goes on to say that the true, charitable person gives discreetly, avoiding public recognition. This person finds just reward in sacrifice and reaps no benefit from it, other than the feeling inside that they had done something good.
It's silly to throw venom at Bill Gates for publicly giving so much money away. Yes, it's insignificant to his lifestyle, and yes the foundation is named after himself. Still, he didn't have to do it. But he did.
Just because we have no public record of Jobs and his charity doesn't mean he hasn't given significantly. Maybe he falls into the category that Christ cited. Or, maybe he's a selfish person who has no designs on charity whatsoever. We don't know.
So, given all this, can't we just see the good that has been done and leave it at that? Why is it necessary to gauge who is *more* charitable and "better?"
Just a note about iChat AV and its ability to do a 4 person chat. They don't advertise this, but apparently you need a G5 to initiate the chats. If your Mac is anything less, like a notebook or the Mini, you're S.O.L.
There's a parable in the Bible about Jesus and his Disciples watching a rich man drop a bag of gold into the collection box, followed by a poor woman who drops the only 2 copper coins she has. Which sacrifice was greater? In order to contribute to such a cause in the proportions that Bill Gates has, you're talking 1.5% of your current net worth. Given that I have negative worth, due to student loans that I haven't paid off, it's not a valid analysis for me, but 1.5% is hardly what I'd call groundbreaking, given that I tithe 5% at Church every week.
Don't get me wrong, it's great that he gave the money, but let's not canonize the guy. He didn't have to give anything, so it's good that he forked it up, but it's hardly all that praiseworthy. At the level of wealth he has, that 1.5% means far less to him than 1.5% would mean to you or I.
Not really a little clarification. It's common for companies with "fiscal" calendars (any calendar whose year end is not considered 12/31) to refer to events using a normal calendar year. Even in their own financials they'll refer to "fiscal 3Q" rather than "3Q" much of the time. Convention is to make statements about events that will happen using a calendar year as the "understood" frame of reference, so any statement to 2Q05 does, in fact, mean April - June 2005.
Careful. Think about what you just said. Immoral leaders is one thing, but gangsters and villains? I think you'd find yourself hard-pressed not to be guilty of similar "villainy" if you were in the same circumstances. How easy it is to pass judgement on less-than-complete information given to you by the media? Everyone's strong opinions on this war, either pro or con, are based on vastly incomplete information. We don't have the facts in front of us that decision makers around the world had. We have the facts the media decided to give us to frame a story that sold headlines. This is a paean to the subjectivity of truth.
And at $1.50, the NYT or WSJ aren't exactly worth doing as a business model. Until you factor in advertising. Something like this is a great place for game companies to hawk their wares to a specific, captive audience that already wants their stuff.
If this is successful, and comes anywhere close to the operating hours of 35 / week / machine, you can count on advertising revenues from software companies AND Alienware to kick in. Spawn a successful business of duplicating a setup like this in a user's home for service revenues and a kickback from the hardware / software vendors for installing their gear at retail? Don't be so myopic. Possibilities are there. It's still a big risk, but the risk/reward mantra in business is true. You have to bet big to win big.
It has less to do with population density in S. Korea and more to do with the fact that the government subsidized broadband. They recognized quickly that having a wired nation would simply bolster awareness and use of computers, rightly figuring that this would improve education levels and modernize their people.
I think it's paid off. I was in Korea for a month last year,traveling the country, and it didnt matter how small the country boo-hick town was, it had a PC Bang (Bang is the Korean word for "room").
It's a matter of the US government deciding if they want to subsidize the growth of broadband or not. As it stands, the fed and state gov'ts do just about everything they can to hinder its growth by taxing it up the bejeezus, forcing higher costs and pricing for the providers.
Simply removing these taxes, and allowing the companies to profit off of their own infrastructure buildouts rather than forcing them to give it away at wholesale prices to competitors simply for the sake of "competition" would inspire a faster broadband rollout.
Not for nothing... but they already have that data if you use a credit card. Unless you pay cash AND don't use those customer discount cards, they have a history of what you've ordered and when. Personally, I save about $2 - $4 when I go shopping with those discount cards, and although I know I'm giving the companies marketing data, why not? It doesn't really matter to me, and I save $3 on average. What's so evil about that?
They can see that a product of theirs is not selling, see what people are buying instead, and try to change / compete with the rest of the market. Heaven forbid they try to run a good business and sell good products!
If you're buying it for $12 and making $4+ a CD I seriously believe that you are gouging us. I don't feel bad for you.
Not a business person, are you? A 33% markup isn't exactly all that great. Wait till you see the markup you're paying for the clothes you're wearing, and it doesn't matter where you got them, either. Want an even more ridiculous markup? Eyeball the softdrink you get with your lunch today and ponder the n-hundred percent markup you just paid for *that.* These small shops don't push the volume nor the product that Wal-mart does, so every sale is really important to them. When it comes time to pay the rent, the bills, restock inventory... it's kinda nice to have something left over to go buy dinner!
Guys, the way this service works is simple. They have deals with RIAA and MPAA, and this enables them to give access to all the music files and movies older than 4 years old. They set up servers on campuses, and those servers store files to be downloaded by the students on their own campus, lowering bandwidth requirements to off-campus locations.
Students can request any song in the 700,000 song library (or whatever the current downloadable music library size is) and if it isn't already on their on-campus server, the server will go get it elsewhere and store it for future downloads. The students can take as much music as they want, but they will NOT NOT NOT be able to transfer these off their computer by any means: mp3 player, burning to CD/DVD.
Let me say that again. They will NOT be able to copy, burn, transfer these files by any means. If they want to do this, they pay the $0.99 per song going rate to get the song in Windows Media format. From that point on, they can copy that song because they own it, and it will come with all the trappings of Windows Media DRM.
Every college campus gets a custom Ruckus website, where students can publish their playlists, and if you like it, you can then download the playlist from the Ruckus server.
Insofar as movies, the reason you can't get movies newer than 4 years old is because of all the deals in place with video rental places, movie theaters, HBO, etc. But, they point out a large segment for demand are cult classics which would be available for download.
I've met with Company management, and this is all from their presentation.
I'm not the one making personal attacks, so just for the record, you're the one that pulled the trigger first. I do, however, apologize for making an assumption of my own with no basis that you are employed in a profession that doesn't force you to test your morals. For that comment, I'm sorry. Going further, you do point out that there don't exist many "blacklists" in the engineering field. I'm sure you appreciate what that could do to you if there were such a dynamic in your professional environment, so I wont expound further. Believe me when I say such things exist in the accounting world.
I've never said fraud is "impossible" to detect. If I did, or if I even implied, you have my apologies for misleading you. That's not at all what I meant to say. What I *meant* to say, if truly I said otherwise, is that fraud is not detectable through any reasonable means. Blind luck could expose it, but such is the case in all things. It's the junior person that may initially detect it, and they'll always report this to a senior because there's no judgement call for them to make.
Ultimately, I'm just pointing out that you, along with just about everyone else in this country, have to rely on the media to tell you the story... but please don't let them tell you your opinion. Understand that they are as unqualified to opine on these situations as they are uninterested in the validity of thier sensationalist allegations. Look no further than the mighty New York Times. How little a stink was made about their less-than-stellar track record in 2003.
Take a critical eye at the framework that accountants are in. You can't just lose clients and lose revenue, as much as it may be the moral thing to do. The problem comes in the fact that the company being audited hires the accounting firm... see the conflict of interest? It gives the fraud-committing company all the cards in the deck. Not only do they control the information they show the accountants to "audit," but if the accountants want to blow a whistle, they can't.
Why, you may ask? Let's say I'm the audit senior and partner auditing your company. I detect what must be fraud and bring this up to the Board of Directors. They tell me that either I give their company a clean opinion, or they'll hire another firm to do the work. I can't, legally, go to the media and tell them what happened. Sucks, huh? You want to know how the current framework addresses this? The "successor auditing company" asks management of your company if they can talk to me about why I was dismissed from the engagement. All I'm allowed to tell them is that you and I disagreed on an "issue" and couldn't come to terms. That's it. They don't get to look at my workpapers, they don't get any specific comments from me on what to look out for, nothing. Your company basically has a second chance to pull the wool over the new auditor's eyes, and they may never detect what I detected.
Don't just look at public accountants and call them scum. Don't only take one more step and blame the warped legal system. Don't fall short with the next step and blame the ignorant government officials that pass these laws into effect, with no true understanding of what they entail. Blame the government for being lazy and letting other people tell them what to do, instead of taking steps to properly *govern* the financial markets by taking matters into their own hands.
If you want my opinion, all auditing should be conducted by the government. Any company that trades securities, be they stock or bonds, should be audited by a team of government officials, at cost to the company being audited. It would ensure that there's nowhere else for them to go. They answer to the top, where the buck stops.
Again, sorry if this got a little more heated than I had originally intended but this topic struck a little closer to home, having witnessed and been close friends to people of high moral fiber that had their entire lives ruined because of this. I have a very close friend
I'm certainly glad people like you don't run this country. Our legal system would be no more complicated than Hammurabi's Code.
I'm fully aware of what integrity is. Perhaps you need to look up the word "reality." I savor the day your morals are truly tested when your choice is between putting food on your family's dinner table or standing up for your integrity. We'll see how self-righteous you are when your career and everything you have worked for is put on the line.
How easy it is to toot your own horn and morality when it's never been tested.
Perhaps my last post was remiss. Instead of pointing out your ignorance as to what an accountant's job really is, I should let you know and educate you.
Your analogy of accountants to police officers is absolutely wrong, so you can start right there. Police are supposed to proactively and reactively fight crime. That's what they do.
Accountants are supposed to show that a company's financial statements are fairly presenting their performance. For example, let's say you own a magazine company. You sell 10 2-year subscriptions for $100 each. You collect $1,000. You don't get to right down all $1,000 as revenue in Year 1. You only take credit for $500. Why? Because the rest of that money wasn't earned yet. If you fail to deliver the goods, those customers have a right to their money back.
Now for the expense side. Let's say you pay $1mm for a machine to print your magazines. You don't get to write down $1mm as an expense the year you buy it, because that would make your financial statements worthless. It's incorrect to have a hit like that when you're likely to get, say, a 10-year life out of that machine. So, one way to address this would be to take a $100,000 expense each year for the next 10 years.
Why bother to do all this? Think of this from the public's perspective. Let's say I'm just a casual investor, and I read your financial statements. All of a sudden, I look at this year's statements and see you've posted a $1mm expense and a terrible loss because of it. I don't get detail as to what that expense is, and I'm not really trained to look for it, as a regular Joe investor. I panic, sell my stock in your company, and so does everyone else that isn't a sophisticated investor. Your stock price tanks, and you, as an insider, smile because you realize the error the market has made. In a year's time, when you're allowed to buy your own stock, you do so at a severe discount knowing that when you release your next year's financial statements, you'll be back generating a profit and you'll ride the stock market wave up with no risk to you.
Now, when it comes to detecting fraud, a public accountant almost doesn't have a chance. You, and your team of internal accountants and finance people, are in charge of keeping documents to show what's happening in your business. All it takes is for 2 people to work together to pull the fraud off. Imagine setting up a framework where you have one person double check everything... but they're in cahoots with the person doing the fraud. Guess what? False documents. Auditors can't discover this. How would you go about trying to find this? You have a budget and a mountainpile of documentation that equates to a Sissyphean task that you barely have time as it is to complete.
Do you work for free? Auditors at the "Final Four" accounting firms make an effective salary that's below minimum wage. They're already working 1 unbilled hour for every hour they get to bill, and that's just how it works. That's what it takes to simply get the basic job done.
All they're there to do is to make sure you correctly classify that machine you bought and expense it over time. They're there to make sure you don't take credit for all $1,000 in subscription revenues when really you only get to take half. This is, of course, using only the crudest examples, but there's a reason this is a 5 year major and getting your CPA now requires a Masters Degree. There are many situations where you wont have precedent or some set rule to refer to. You have to use your knowledge of accounting and make a judgement call and *that* is why they pay all that money to the accounting firms to hire top level graduates to do, basically, a monkey's task.
Anyway, I hope that clears up what an accountant is *supposed* to do. They're not crimefighters. They're specifically not supposed to go looking for fraud. If they find it, all they can do is report it to the Board of Directors. If you have any further questions on the matter, I'll field them via email directly.
You are exactly correct. An audit *is* pointless. You completely missed everything I was saying. Stop a moment. Breathe. Actually bother to read what I was saying, rather than go on the witch hunt looking to extract the meaning from my words that you want.
The real world is not so simple. A junior member of an audit team is the first person to notice the fraud because they're the ones doing the actual looking. They report this to their seniors, and they have no say over what happens. If they do want to blow a whistle, then great. +1 to their morality, and now they're out of a job and blacklisted in an VERY tight-knit industry. All that hard work in college, all that money spent educating, all that sacrifice goes down the tube because although they did the right thing, they're now a stoolie.
How easy it is for you to wag your finger at them. How easy it is for you to tell them how useless their job is and how pointless their profession is. Nobody knows this better than they do.
The framework of the system does NOTHING to protect the whistleblower. And even if they report it and make a rant, it's still not their decision, ultimately. If they want to report their findings to the press, they've done the equivalent of disbarring themselves from the industry. An audit senior or partner is not going to be responsible for losing a multi-million dollar account, either. So until somebody decides to correct the system, it will continue to malfunction.
Life isn't black and white. Stop thinking like a 10 year old and realize that the real world is rife with mitigating circumstances, all of which you NEVER find out through the liberal media. Nobody truly knows what happened behind the scenes. I'm not interested in conspiracy theory, but the real world is an ugly place. I'm guessing your chosen profession doesn't require you to test your morals. So stop judging those who are in such a position because you have no idea what they go through.
I'm not defending the accountants. I'm simply pointing out that it's not all their fault. Instead of looking for more people to blame, look no further than the slimey, greedy bastards that inflicted the fraud.
And if you're still reading, and if you even care, the point of an audit is not to uncover fraud. Fraud, if executed correctly, is not detectable by reasonable means. Luck can uncover it, surely, but fraud requires collusion of several people, and it's easy to pull the wool over an auditors eyes which is why public firms *explicitly* state that the point of an audit is NOT to discover fraud. Rather, it's to make sure that financial statements fairly state a company's performance. This may sound ridiculously easy to you, but I encourage you to try it before dismissing it.
The only thing keeping accounting from being a science is the lack of integrity in the people practicing it.
Nice. Very nice. Isn't it wonderful how simple the world becomes when you paint everything black and white? I'm an accountant, although not working as one anymore. I've done my tour of duty in public accounting, including audits, and I can say accounting is definitely not a science. It's just a way things are done.
That said, to blame accountants for recent fraud is about as correct as calling U.S. Armed Forces "murderes" because they've killed people shooting at them across the sea.
The audit accountant that finds fraud quickly finds him/herself squashed by the audit senior. This person reports to the Partner in charge of that client, who can try to bring up the error or fraud. The problem comes in the fact that these enormous companies pay out millions of dollars in accounting fees for these audits, and it's just as easy for them to say, "huh... so you wont give me a clean, unqualified opinion? I'm sure PwC will..." And next thing you know, you're backpedalling, not wanting to be the person that just lost your company a $10mm / year account.
The mechanism in place strips the accounting firms of any power to excercise their morality if they want to also keep their revenues. It's all good and well to be high and mighty like some sanctimonious prick, but when your bread and butter depend on decisions like this, life is no longer so simple.
Rather than blame accountants (who didn't execute the fraud in the first place... that was done by their CLIENTS' corporate officers), why not take a critical look at the system in which they're supposed to operate.
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I've read some postings here, and I think that the parable of the poor widow is close, but not quite on mark. There is another parable where Jesus points out that a person that gives something to charity in a public way to engender the praise and accolades of others has *already* received just reward for the charity. Hence, the act will not be looked favorably upon by the Big Guy.
He goes on to say that the true, charitable person gives discreetly, avoiding public recognition. This person finds just reward in sacrifice and reaps no benefit from it, other than the feeling inside that they had done something good.
It's silly to throw venom at Bill Gates for publicly giving so much money away. Yes, it's insignificant to his lifestyle, and yes the foundation is named after himself. Still, he didn't have to do it. But he did.
Just because we have no public record of Jobs and his charity doesn't mean he hasn't given significantly. Maybe he falls into the category that Christ cited. Or, maybe he's a selfish person who has no designs on charity whatsoever. We don't know.
So, given all this, can't we just see the good that has been done and leave it at that? Why is it necessary to gauge who is *more* charitable and "better?"
-ept
Just a note about iChat AV and its ability to do a 4 person chat. They don't advertise this, but apparently you need a G5 to initiate the chats. If your Mac is anything less, like a notebook or the Mini, you're S.O.L.
Don't get me wrong, it's great that he gave the money, but let's not canonize the guy. He didn't have to give anything, so it's good that he forked it up, but it's hardly all that praiseworthy. At the level of wealth he has, that 1.5% means far less to him than 1.5% would mean to you or I.
Not really a little clarification. It's common for companies with "fiscal" calendars (any calendar whose year end is not considered 12/31) to refer to events using a normal calendar year. Even in their own financials they'll refer to "fiscal 3Q" rather than "3Q" much of the time. Convention is to make statements about events that will happen using a calendar year as the "understood" frame of reference, so any statement to 2Q05 does, in fact, mean April - June 2005.
Careful. Think about what you just said. Immoral leaders is one thing, but gangsters and villains? I think you'd find yourself hard-pressed not to be guilty of similar "villainy" if you were in the same circumstances. How easy it is to pass judgement on less-than-complete information given to you by the media? Everyone's strong opinions on this war, either pro or con, are based on vastly incomplete information. We don't have the facts in front of us that decision makers around the world had. We have the facts the media decided to give us to frame a story that sold headlines. This is a paean to the subjectivity of truth.
If this is successful, and comes anywhere close to the operating hours of 35 / week / machine, you can count on advertising revenues from software companies AND Alienware to kick in. Spawn a successful business of duplicating a setup like this in a user's home for service revenues and a kickback from the hardware / software vendors for installing their gear at retail? Don't be so myopic. Possibilities are there. It's still a big risk, but the risk/reward mantra in business is true. You have to bet big to win big.
It has less to do with population density in S. Korea and more to do with the fact that the government subsidized broadband. They recognized quickly that having a wired nation would simply bolster awareness and use of computers, rightly figuring that this would improve education levels and modernize their people. I think it's paid off. I was in Korea for a month last year,traveling the country, and it didnt matter how small the country boo-hick town was, it had a PC Bang (Bang is the Korean word for "room"). It's a matter of the US government deciding if they want to subsidize the growth of broadband or not. As it stands, the fed and state gov'ts do just about everything they can to hinder its growth by taxing it up the bejeezus, forcing higher costs and pricing for the providers. Simply removing these taxes, and allowing the companies to profit off of their own infrastructure buildouts rather than forcing them to give it away at wholesale prices to competitors simply for the sake of "competition" would inspire a faster broadband rollout.
Not for nothing... but they already have that data if you use a credit card. Unless you pay cash AND don't use those customer discount cards, they have a history of what you've ordered and when. Personally, I save about $2 - $4 when I go shopping with those discount cards, and although I know I'm giving the companies marketing data, why not? It doesn't really matter to me, and I save $3 on average. What's so evil about that? They can see that a product of theirs is not selling, see what people are buying instead, and try to change / compete with the rest of the market. Heaven forbid they try to run a good business and sell good products!
If you're buying it for $12 and making $4+ a CD I seriously believe that you are gouging us. I don't feel bad for you. Not a business person, are you? A 33% markup isn't exactly all that great. Wait till you see the markup you're paying for the clothes you're wearing, and it doesn't matter where you got them, either. Want an even more ridiculous markup? Eyeball the softdrink you get with your lunch today and ponder the n-hundred percent markup you just paid for *that.* These small shops don't push the volume nor the product that Wal-mart does, so every sale is really important to them. When it comes time to pay the rent, the bills, restock inventory... it's kinda nice to have something left over to go buy dinner!
Students can request any song in the 700,000 song library (or whatever the current downloadable music library size is) and if it isn't already on their on-campus server, the server will go get it elsewhere and store it for future downloads. The students can take as much music as they want, but they will NOT NOT NOT be able to transfer these off their computer by any means: mp3 player, burning to CD/DVD.
Let me say that again. They will NOT be able to copy, burn, transfer these files by any means. If they want to do this, they pay the $0.99 per song going rate to get the song in Windows Media format. From that point on, they can copy that song because they own it, and it will come with all the trappings of Windows Media DRM.
Every college campus gets a custom Ruckus website, where students can publish their playlists, and if you like it, you can then download the playlist from the Ruckus server.
Insofar as movies, the reason you can't get movies newer than 4 years old is because of all the deals in place with video rental places, movie theaters, HBO, etc. But, they point out a large segment for demand are cult classics which would be available for download.
I've met with Company management, and this is all from their presentation.
-evilplushtoy
I've never said fraud is "impossible" to detect. If I did, or if I even implied, you have my apologies for misleading you. That's not at all what I meant to say. What I *meant* to say, if truly I said otherwise, is that fraud is not detectable through any reasonable means. Blind luck could expose it, but such is the case in all things. It's the junior person that may initially detect it, and they'll always report this to a senior because there's no judgement call for them to make.
Ultimately, I'm just pointing out that you, along with just about everyone else in this country, have to rely on the media to tell you the story... but please don't let them tell you your opinion. Understand that they are as unqualified to opine on these situations as they are uninterested in the validity of thier sensationalist allegations. Look no further than the mighty New York Times. How little a stink was made about their less-than-stellar track record in 2003.
Take a critical eye at the framework that accountants are in. You can't just lose clients and lose revenue, as much as it may be the moral thing to do. The problem comes in the fact that the company being audited hires the accounting firm... see the conflict of interest? It gives the fraud-committing company all the cards in the deck. Not only do they control the information they show the accountants to "audit," but if the accountants want to blow a whistle, they can't.
Why, you may ask? Let's say I'm the audit senior and partner auditing your company. I detect what must be fraud and bring this up to the Board of Directors. They tell me that either I give their company a clean opinion, or they'll hire another firm to do the work. I can't, legally, go to the media and tell them what happened. Sucks, huh? You want to know how the current framework addresses this? The "successor auditing company" asks management of your company if they can talk to me about why I was dismissed from the engagement. All I'm allowed to tell them is that you and I disagreed on an "issue" and couldn't come to terms. That's it. They don't get to look at my workpapers, they don't get any specific comments from me on what to look out for, nothing. Your company basically has a second chance to pull the wool over the new auditor's eyes, and they may never detect what I detected.
Don't just look at public accountants and call them scum. Don't only take one more step and blame the warped legal system. Don't fall short with the next step and blame the ignorant government officials that pass these laws into effect, with no true understanding of what they entail. Blame the government for being lazy and letting other people tell them what to do, instead of taking steps to properly *govern* the financial markets by taking matters into their own hands.
If you want my opinion, all auditing should be conducted by the government. Any company that trades securities, be they stock or bonds, should be audited by a team of government officials, at cost to the company being audited. It would ensure that there's nowhere else for them to go. They answer to the top, where the buck stops.
Again, sorry if this got a little more heated than I had originally intended but this topic struck a little closer to home, having witnessed and been close friends to people of high moral fiber that had their entire lives ruined because of this. I have a very close friend
I'm fully aware of what integrity is. Perhaps you need to look up the word "reality." I savor the day your morals are truly tested when your choice is between putting food on your family's dinner table or standing up for your integrity. We'll see how self-righteous you are when your career and everything you have worked for is put on the line.
How easy it is to toot your own horn and morality when it's never been tested.
-evilplushtoy.
Your analogy of accountants to police officers is absolutely wrong, so you can start right there. Police are supposed to proactively and reactively fight crime. That's what they do.
Accountants are supposed to show that a company's financial statements are fairly presenting their performance. For example, let's say you own a magazine company. You sell 10 2-year subscriptions for $100 each. You collect $1,000. You don't get to right down all $1,000 as revenue in Year 1. You only take credit for $500. Why? Because the rest of that money wasn't earned yet. If you fail to deliver the goods, those customers have a right to their money back.
Now for the expense side. Let's say you pay $1mm for a machine to print your magazines. You don't get to write down $1mm as an expense the year you buy it, because that would make your financial statements worthless. It's incorrect to have a hit like that when you're likely to get, say, a 10-year life out of that machine. So, one way to address this would be to take a $100,000 expense each year for the next 10 years.
Why bother to do all this? Think of this from the public's perspective. Let's say I'm just a casual investor, and I read your financial statements. All of a sudden, I look at this year's statements and see you've posted a $1mm expense and a terrible loss because of it. I don't get detail as to what that expense is, and I'm not really trained to look for it, as a regular Joe investor. I panic, sell my stock in your company, and so does everyone else that isn't a sophisticated investor. Your stock price tanks, and you, as an insider, smile because you realize the error the market has made. In a year's time, when you're allowed to buy your own stock, you do so at a severe discount knowing that when you release your next year's financial statements, you'll be back generating a profit and you'll ride the stock market wave up with no risk to you.
Now, when it comes to detecting fraud, a public accountant almost doesn't have a chance. You, and your team of internal accountants and finance people, are in charge of keeping documents to show what's happening in your business. All it takes is for 2 people to work together to pull the fraud off. Imagine setting up a framework where you have one person double check everything... but they're in cahoots with the person doing the fraud. Guess what? False documents. Auditors can't discover this. How would you go about trying to find this? You have a budget and a mountainpile of documentation that equates to a Sissyphean task that you barely have time as it is to complete.
Do you work for free? Auditors at the "Final Four" accounting firms make an effective salary that's below minimum wage. They're already working 1 unbilled hour for every hour they get to bill, and that's just how it works. That's what it takes to simply get the basic job done.
All they're there to do is to make sure you correctly classify that machine you bought and expense it over time. They're there to make sure you don't take credit for all $1,000 in subscription revenues when really you only get to take half. This is, of course, using only the crudest examples, but there's a reason this is a 5 year major and getting your CPA now requires a Masters Degree. There are many situations where you wont have precedent or some set rule to refer to. You have to use your knowledge of accounting and make a judgement call and *that* is why they pay all that money to the accounting firms to hire top level graduates to do, basically, a monkey's task.
Anyway, I hope that clears up what an accountant is *supposed* to do. They're not crimefighters. They're specifically not supposed to go looking for fraud. If they find it, all they can do is report it to the Board of Directors. If you have any further questions on the matter, I'll field them via email directly.
-evilplushtoy.
The real world is not so simple. A junior member of an audit team is the first person to notice the fraud because they're the ones doing the actual looking. They report this to their seniors, and they have no say over what happens. If they do want to blow a whistle, then great. +1 to their morality, and now they're out of a job and blacklisted in an VERY tight-knit industry. All that hard work in college, all that money spent educating, all that sacrifice goes down the tube because although they did the right thing, they're now a stoolie.
How easy it is for you to wag your finger at them. How easy it is for you to tell them how useless their job is and how pointless their profession is. Nobody knows this better than they do.
The framework of the system does NOTHING to protect the whistleblower. And even if they report it and make a rant, it's still not their decision, ultimately. If they want to report their findings to the press, they've done the equivalent of disbarring themselves from the industry. An audit senior or partner is not going to be responsible for losing a multi-million dollar account, either. So until somebody decides to correct the system, it will continue to malfunction.
Life isn't black and white. Stop thinking like a 10 year old and realize that the real world is rife with mitigating circumstances, all of which you NEVER find out through the liberal media. Nobody truly knows what happened behind the scenes. I'm not interested in conspiracy theory, but the real world is an ugly place. I'm guessing your chosen profession doesn't require you to test your morals. So stop judging those who are in such a position because you have no idea what they go through.
I'm not defending the accountants. I'm simply pointing out that it's not all their fault. Instead of looking for more people to blame, look no further than the slimey, greedy bastards that inflicted the fraud.
And if you're still reading, and if you even care, the point of an audit is not to uncover fraud. Fraud, if executed correctly, is not detectable by reasonable means. Luck can uncover it, surely, but fraud requires collusion of several people, and it's easy to pull the wool over an auditors eyes which is why public firms *explicitly* state that the point of an audit is NOT to discover fraud. Rather, it's to make sure that financial statements fairly state a company's performance. This may sound ridiculously easy to you, but I encourage you to try it before dismissing it.
-evilplushtoy
Nice. Very nice. Isn't it wonderful how simple the world becomes when you paint everything black and white? I'm an accountant, although not working as one anymore. I've done my tour of duty in public accounting, including audits, and I can say accounting is definitely not a science. It's just a way things are done.
That said, to blame accountants for recent fraud is about as correct as calling U.S. Armed Forces "murderes" because they've killed people shooting at them across the sea.
The audit accountant that finds fraud quickly finds him/herself squashed by the audit senior. This person reports to the Partner in charge of that client, who can try to bring up the error or fraud. The problem comes in the fact that these enormous companies pay out millions of dollars in accounting fees for these audits, and it's just as easy for them to say, "huh... so you wont give me a clean, unqualified opinion? I'm sure PwC will..." And next thing you know, you're backpedalling, not wanting to be the person that just lost your company a $10mm / year account.
The mechanism in place strips the accounting firms of any power to excercise their morality if they want to also keep their revenues. It's all good and well to be high and mighty like some sanctimonious prick, but when your bread and butter depend on decisions like this, life is no longer so simple.
Rather than blame accountants (who didn't execute the fraud in the first place... that was done by their CLIENTS' corporate officers), why not take a critical look at the system in which they're supposed to operate.
-evilplushtoy