Newspaper logo  
 
 
Local Stories, Events

Ref. : Civic Events

Ref. : Arts & Education Events

Ref. : Public Service Notices

Books, Films, Arts & Education

08.11 DeVos Ends Obama-Era Safeguards Aimed at Abuses by For-Profit Colleges [an Administration that's consistent in its predatorial immorality—helping the rich by hurting the poor and uninformed]

08.11 'Disaster Capitalism Strikes Again!': Puerto Rico's High Court Gives Green Light to Charter Schools, Vouchers [Drinking Betsy DeVos' poisoned Kool Aid]

Letters

Ref. : Letters to the editor

Health Care & Environment

08.14 As America Burns From Climate Change, Trump Officials Attend Denial Conference to Discuss Why Climate Change is Fake [stunningly stupid—killing everything to maximize fossil asset profits]

08.13  Sweltering cities  Halfway to boiling: the city at 50C

08.11 Toxic Corruption: The Chemical Industry Keeps Pulling EPA's Strings

08.11 'It's heartbreaking': Killer whale continues carrying dead calf for 'unprecedented' length of mourning [extinctions like this can be minimized if humans try...]

08.10 Banning Single-Use Plastics: Can Armenia Take Out the Trash for Good?

08.10 'Major Victory for Public Health': Court Orders Trump EPA to Ban Pesticide That Harms Kids' Brains

08.10 Jacinda Ardern says New Zealand will ban plastic bags

08.09 Solar With Storage Surges as Gas Falls

08.09 Why We Need More Women Involved in Creating Environmental Policy

08.08 Medicare for All Makes A Lot of Sense [greed trumps morality, so far...]

News Media Matters

08.13 More than 100 US newspapers plan editorials decrying Trump media attacks [do Trump's childish opinions define Truth?]

08.10 The White Nationalists Are Winning

Daily: FAIR Blog
The Daily Howler

US Politics, Policy & 'Culture'

08.14 How the House Judiciary Committee’s Makeup Will Shape Impeachment

08.14 Public Sector Workers Should Have the Right to Strike

08.14 A Change Is Gonna Come': Poll Shows Democratic Voters Like Socialism More Than Capitalism

08.12 Conservatives call for constitutional intervention last seen 230 years ago [wackos want ‘freedom’]

08.11 Confused By Emoluments? The Founding Fathers Would Have Impeached Trump in a New York Minute [Intents purposely written into “living documents” by the Founding Fathers should not be destroyed by literal strictures demanded by present-day Federalist Society judges]

08.11 The Left Is Just Getting Started

08.11 'Absolute Failure': DNC Passes Perez Resolution Reversing Ban on Donations From Fossil Fuel PACs [its amazing so many are tone-deaf/blind on these issues]

Justice Matters
High Crimes?

08.10 'Can You Imagine Living Like This?' Pregnant Woman and Toddler Among Those Killed in Israel's Latest Vicious Assault on Gaza

08.10 'We Just Bombed a SCHOOL BUS': Outrage After US-Backed Saudi Coalition Slaughters Children in Yemen

Economics, Crony Capitalism

08.12 Why Public Banks Are Suddenly Popular

08.10 Buried in the Fine Print, Trump Rule Would Give $2.5 Billion Tax Cut to Big Bank Fat Cats

08.09 Rick Gates Delivers a Public Lesson on Money Laundering and Political Corruption

International & Futurism

08.14 Israel, This Is Not Who We Are

08.13 Turkish lira crisis: central bank action fails to quell contagion fears

08.10 'A devastating scenario': Brazil sets new record for homicides at 63,880 deaths

08.09 The Guardian view on Saudi Arabia: time to back Canada

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: