Newspaper logo  
 
 
Local Stories, Events

Ref. : Civic Events

Ref. : Arts & Education Events

Ref. : Public Service Notices

Books, Films, Arts & Education
Letters

Ref. : Letters to the editor

Health Care & Environment

11.22 Hinkley Point C subsidy has dealt consumers 'a bad hand', say MPs [even ignoring the possibly huge costs of nuclear calamities in the future...]

11.22 Renewables will drive 'steep decline' in wholesale electricity price in Australia – report [with a steep decline in air pollution too!]

11.22 Too right it's Black Friday: our relentless consumption is trashing the planet

11.22 Poor sperm quality linked to air pollution

11.21 Jet fuel from sugarcane? It’s not a flight of fancy

11.20 Replacing Liddell coal plant with clean energy $1.3bn cheaper – analysis

11.20 Battered by extreme weather, Americans are more worried about climate change [graphs]

11.20 Luxury Socialized Medicine

11.20 Keystone XL pipeline decision: what's at stake and what comes next? [the public's water is at risk]

11.20 A civil rights 'emergency': justice, clean water and air in the age of Trump

11.19 27-Year Study Finds the Amount of Insects Flying in the Air Has Declined 75 Percent

11.19 'My eyes are burning': Delhi holds half marathon despite pollution warning [“Stupid is as stupid does.” –Forrest Gump]

11.17 'We should be on the offensive' – James Hansen calls for wave of climate lawsuits

11.17 Keystone pipeline leaks estimated 210,000 gallons of oil in South Dakota

11.17 For Damage Done and Transition Needed, 50+ Groups Demand Global Fossil Fuel Tax

News Media Matters

11.22 RIP net neutrality: FCC chair releases plan to deregulate ISPs [like the end of The Fairness Doctrine for the news media under Reagan, we expect content and practices to tilt further to favor monoplies and 'conservatives']

11.18 The Paradise Papers: How Ridiculously Easy It Is For The Rich To Avoid Taxes [birds of a feather flock together]

Daily: FAIR Blog
The Daily Howler

US Politics, Policy & 'Culture'

11.22 Christian Theocracy, Authoritarianism, And The Blind Support Of Roy Moore

11.22 Can Republicans Stem the Tide of Women Abandoning Their Party?

11.21 Why is Donald Trump launching a withering attack on nonprofits?

11.21 Lies, Incoherence and Rage on Tax Cuts

11.21 Inequality Out of Control: The Average 1% Household Is Over $2.5 Million Richer in the Past Year

11.21 World’s Cheapest Solar Power in Mexico a Coal-Killer [Trump's obsession to help the coal industry and power plants is obviously stupid in many ways]

11.15 GOP Tax Bill Would Trigger $25 Billion in Cuts to Medicare, Warns CBO

Justice Matters
High Crimes?

11.18 US, European Nations Slammed for 'Complicity' as Humanitarian Groups Demand Aid for Yemen

Economics, Crony Capitalism

11.20 Monaco builds into the Med to house new throng of super-rich [Can we ever have laws to fully prosecute $Billionaire tax dodgers if the courts and government are bribed? If not, can we have a civilized anarchy instead?]

11.19 The Design Flaw at the Core of Humanity's Malaise

11.18 'All Out Class War': GOP Bill Cuts Taxes for Private Jet Owners, Hikes Taxes on Students

International & Futurism

11.22 The long read: After the liberation of Mosul, an orgy of killing

11.22 Coup in Zimbabwe: A win-win for China – for now

11.22 Vladimir Putin briefs Donald Trump on plan to end Syrian civil war [in the forthcoming agreement, we presume that all of the oil and gas wealth (from pipeline decisions, etc.) will go to the warlords du jour, with only nice words for the people of the region who have suffered so much...]

11.21 The Saudi System And Why Its Change May Fail

11.21 Saudi Billionaires Look for Ways to Protect Assets From Any Government Purge

11.20 Zimbabwe is not the banana republic of western fancy. After Mugabe, it can thrive [let's all pretend like he really did resign...] [when it's safe, create and grow a government sovereign wealth fund with national mineral wealth mining profits—like Norway did—to facilitate becoming a stronger society, improve public services and build a world-class economy]

11.20 EU to push for 40% quota for women on company boards

We are a non-profit Internet-only newspaper publication founded in 1973. Your donation is essential to our survival.

You can also mail a check to:
Baltimore News Network, Inc.
P.O. Box 42581
Baltimore, MD 21284-2581
Google
This site Web
  Print view: Thinking About Accounting
COMMENTARY:

Thinking About Accounting

by Fred Cederholm
The government and the legislative/ regulatory arms of the government have been the pimps for this new “black is white” snow job of the “opposites.” Governmental (or regulatory) accounting has become a terminal practice of misrepresentation.

I’ve been thinking about accounting. Actually I’ve been thinking about 2007/ 2008/ 2009/ 2010/ and 2011, the practice of accounting, the economy, business, government, and realities. Accounting is more than the collection of numbers on a few sheets of paper. Accounting has a long history of “telling what is what” at any point in time. It is supposed to be consistent, verifiable, and immune from manipulation. Au contraire, mon ami, au contraire... you might TH*NK... How does that old saying go? “Figures don’t lie, but the liars sure can figure.” Please read on...

You see when I was in graduate school in business at the University of Illinois working on a Master’s Degree in “Accounting Science” in the late 1970s. The U of I had the top accounting school in the entire US. I took the required colloquium in accounting “theory” with the brilliant Professor Park. We never knew what path (or subject) he was going to attack in any one of his class sessions. The criminal cases we covered and “discussed” seemed so disjointed and the perpetrators usually walked away initially with MILLIONS (remember that this over thirty years ago when a million was a big deal). If they were convicted at all, it usually had nothing really to do with the faulty accounting... well not really as the game played out. It was the “activity” adjuncts that nailed their sorry butts to the wall in the years later. Still... the accounting was critical to the frauds, the crimes, and the misdemeanors. And does surface prominently when the redress is sought, and the guilty parties are finally convicted.

Professor Park’s final exam for the class NONE of his students truly understood was basically three questions: “Is accounting an art? A science? And, Why?” It was an evening exam so Park told us we could take as much time as we wanted. Most of the grad students were baffled and were mad as HELL. During the last weeks of the class, I felt I had an idea about what “theory” Park was working towards in his advanced accounting theory colloquium. I started out defining “art” as a man made creation, a thing of beauty, an often misunderstood abomination, something whose value was different for each person. Yes, accounting might be construed as an “art.” But, there was far more...

Accounting was also a “science” in the sense that there are rules and natural consistencies which are cumulative --- that build upon each other. These can be stated and must be observed if the financial statements are to work for one and all of the users. There are a balance sheet with assets and liabilities, and an income statement which must work in unison to tell the complete story of any entity over time. There are debits and credits which must be equal in value. A reading of the financials should be similar in interpretation to each of multiple readers, or something is amiss. Accounting is really a language --- it is the language of business. The purpose of a language is to communicate. Its unfolding should divulge the same information to each of the different people who read and study its tale of what occurred in the time frame described. TH*NK about THAT in light of the events of the past years.

We have dug ourselves into a deep hole of debt. Our concepts of assets and liabilities have completely lost their way. Our money is backed only by a liability, and as such is no asset --- although there is still the across the board attempt to value all things in terms of money! Does that mean that all things are liabilities? He who owes the most wins? That has become the mantra of Wall Street and the investment lending community. Would the investment bankers have been so successful in riding this nation (and the world) into the ground were it not for this mishandling of the accounting behind the story? Would they have been able to market their derivative investments so successfully where opposites rule our TH*NK*NG and compromise our evaluative powers?

Trust me... there is no new math, no easy new path to riches, and NO new accounting which is not in reality criminal in intent. There are clearly some debits or credits missing in the financial statements we have been given to hype the most recent boom, bubble(s), fraud(s), and governmental policies. Things are about to change, they have too... The time honored truths which came from centuries of valid accounting information are going to resurface in this coming year, or year(s). This happens after every bust in history. We are only just beginning to be shared the accounting (black) magic of the Federal Reserve Bank. The bailout was not the TARP of $800 BILLION used to purchase and warehouse the bad (as in worthless) paper assets of the financial community. It will prove to be far more than the MULTIPLE TRILLIONs in electronic money actually showered world-wide by the FED. Off the books may have been the way of the past, but it will NOT be the fix of the future!

The government and the legislative/ regulatory arms of the government have been the pimps for this new “black is white” snow job of the “opposites.” Governmental (or regulatory) accounting has become a terminal practice of misrepresentation. Governments operate from an income (loss) statement only presentation of their situations. There is no balance sheet with the comprehensive statements of the assets and liabilities. They are at best package a statement of changes in liabilities as “their balance sheet.” It doesn’t work, but why should it have to, it is for the government??? The checks and balances are simply not there. Our only hope for a revelation of the whole accounting behind the story on page one of what has happened can lead us to a remedy, a fix, and a return to real prosperity. Watch the news and how accounting will prove at the center of all of it. We will be in for quite a year... CHEERS!!!

I’m Fred Cederholm and I’ve been thinking. You should be thinking, too.


Copyright 2010 Questions, Inc. All rights reserved. Fred Cederholm is a CPA/CFE, a forensic accountant, and writer. He is a graduate of the University of Illinois (B.A., M.A. and M.A.S.). He can be reached at asklet@rochelle.net.



Copyright © 2010 The Baltimore News Network. All rights reserved.

Republication or redistribution of Baltimore Chronicle content is expressly prohibited without their prior written consent.

Baltimore News Network, Inc., sponsor of this web site, is a nonprofit organization and does not make political endorsements. The opinions expressed in stories posted on this web site are the authors' own.

This story was published on December 27, 2010.

 

Public Service Ads: