Don’t Worry, The Multi-millions Spent On Accounting and Board of Director Leadership Are Undoubtedly Well Spent. I can’t wait for The New York Times Best Selling Book in the fiction category titled “How General Motors Did Not Know They Were Screwing Up Their Numbers” This began, according to the press, in 2000. What about a sequel: “Our Latest Late Filing With The SEC Where We Explain Nothing” . Maybe FOX will pick it up as a reality TV show Titled “The Accounting Apprentice”
But wait, surely there Is a mistake. After all, we now have Sarbanes Oxley. Our political leaders spent hundreds of millions of dollars to protect the investors in public companies with this legislation. Wait there’s more…remember there are the outside experts hired to make sure the Sarbanes Oxley Act is followed and the numbers are materially correct. Certainly there can be no mistake here because they have been paid millions upon millions.
Do you think there is an adequate explanation? Do you think this is an ordinary part of doing business? I think this is another disgrace to the process of accounting for business. It really is not that hard to account for business transactions, no matter how large the company.
Sarbanes-Oxley is now about three years old. The accounting and legal firms particularly since the passage of that law have been put on notice regarding their responsibility for “signing off” off on management’s responsibility for a sound system of internal controls. How did they come to their conclusions everything was fine?
The mistake in accounting for a certain company’s earnings which is owned by General Motors is symptomatic of a material weakness in internal accounting controls. This is a direct violation of accounting 101 and Sarbanes Oxley. This is further exacerbated by the disclosure of other accounting errors dating back to 2000 and the entire five year period from 2000 to 2005.
Accurate reporting the results of operations cannot be legislated. If one of the largest companies in the world can have a system in place that results in the material misstatement of results, then that is proof positive misstatements can and will happen anywhere. Let the buyer beware.
Business Development Consulting
PS. Do you think this mess stated in 2000? I am thinking it goes back a lot furher
Steve Pohlit is a CPA has his MBA and has been the CFO of several major domestic and international companies. Today Steve is an expert business consultant focused on helping companies improve their business performance including growing profits, revenues and customers. For a FREE 6 week mini course where you will receive 10 easy to implement action steps guaranteed to increase business revenue in profits by at least 30% in the next 90 days, please visit www.StevePohlit.com All articles published by Steve unless specifically restricted may be freely published with this resource box in tact.