
Accounting Standards Wilt Under Pressure - mattmcknight
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/26/AR2008122601715.html?hpid=topnews
======
indiejade
Accounting standards could, theoretically and technically, be as transparent
and open as OSS. As far as the IASB and FASB's manufactured reporting
standards to the public go, they might not even need to exist: transparent
accounting could really solve most of these issues. Deception can only occur
when some aspect of the formula is mired or obscured. I truly think
transparency in accounting is going to be the wave of the future.

My Bachelor's is in Accounting, and one of the reasons I chose to not go into
financial (or tax) accounting was this very reason: the legalities. It's just
too easy to find a loophole and to adjust financial statements to be appealing
to whatever audience an accountant wishes, inside stock owners or outside
stakeholders. What portrait I am forced to paint is directly correlated to
whomever is paying me. Yeah, technically it might be "legal" but it's not
always an accurate or truthful portrait of a company's financial position.
Ethics are a giant issue in accounting.

There's a reason the big five accounting firms were reduced to the big 4: SOX
always gets a bad rap, but its intentions were really decent. It's just that
the degree of complexity has risen beyond an efficient means to capture that
complexity.

Openness and transparency, then, are actually the best and most efficient
ways.

~~~
anamax
> There's a reason the big five accounting firms were reduced to the big 4:

Judicial error and/or prosecutorial misconduct appears to be the reason. From
the Arthur Anderson Wikipedia page. "[In the ruling vacating the conviction]
The [Supreme] court found that the instructions were worded in such a way that
Andersen could have been convicted without any proof that the firm knew it had
broken the law or that there had been a link to any official proceeding that
prohibited the destruction of documents."

------
fallentimes
So many organizations, so many acronyms, so much talk, but nothing is getting
done. This:

 _The results were dramatic. Deutsche Bank shifted $32 billion of troubled
assets, turning a $970 million quarterly pretax loss into $120 million profit.
And the securities markets were fooled, bidding Deutsche Bank's shares up
nearly 19 percent on Oct. 30, the day it made the startling announcement that
it had turned an unexpected profit._

is exactly what these organizations were supposed to stop. Instead they
_knowingly_ allowed it.

