Newspaper logo  
 
 
Local Stories, Events

02.21 Roads to nowhere: how infrastructure built on American inequality [the cure is not more of the same]

Ref. : Civic Events

Ref. : Arts & Education Events

Ref. : Public Service Notices

Books, Films, Arts & Education
Letters

Ref. : Letters to the editor

Health Care & Environment

02.25 The terrifying phenomenon that is pushing species towards extinction

02.24 In 'Tremendous Victory for Taxpayers, Public Health, and Planet,' Federal Court Rejects Trump Admin.'s Attempt to Suspend Methane Rule

02.24 Weatherwatch: floating windfarms prove their worth

02.23 In the Trump Administration, the Polluters Are in Control

02.22 Standing Rock is everywhere: one year later

02.22 Red Cloud’s Revolution: Oglalla Sioux Freeing Themselves From Fossil Fuel [making an "engine for good" that creates good jobs & products enabling the tribe to cut or eliminate polluting fossil-power utility bills]

02.21 Newborn survival rates in US only slightly better than in Sri Lanka [caused by highest-profit, non-universal healthcare and the political war against Planned Parenthood pre-natal care by willfully ignorant Republicans]

02.21 Maternal Health Care Is Disappearing in Rural America

02.21 Climate change 'will push European cities towards breaking point'

02.20 'Much work needed' to make digital economy environmentally sustainable

02.20 'Sloppy and careless': courts call out Trump blitzkrieg on environmental rules [what happens when good judges are replaced with Trump-judges?]

News Media Matters

Daily: FAIR Blog
The Daily Howler

US Politics, Policy & 'Culture'

02.25 Democrats defend Russia inquiry in response to Republicans' Nunes memo

02.25 The Frat House of Representatives [ubiquitous lying and corruption]

02.25 Robert Mueller’s Distinctly American Indictments [ubiquitous lying and corruption]

02.24 Demanding 'Fundamental Restructuring of the Economy,' Progressives Embrace Bold New Agenda

02.24 'Corruption, Plain and Simple': Public Comments Show Outrage at CFPB's Corporate Turn Under Mulvaney

02.24 Fears grow as rightwing billionaires battle to erode US union rights

02.23 California agriculture sees 'chilling, damaging effect' from wave of immigration audits

02.23 Where Gun-Control Advocates Could Win in 2018

02.23 White House indicates it could find funds to train and arm 1 million teachers [2:03 video; Trump proposes what gun manufacturers and NRA want rather than confiscating assault weapons that Australia has proven works]

Justice Matters

02.23 Robert Mueller files 32 new fraud charges against ex-Trump aides

02.22 Paul Manafort got $16 million in loans after the election. Mueller finds that very interesting.

High Crimes?

02.23 Medical crisis in east Ghouta as hospitals 'systematically targeted' [war crimes continue – why are the UN and ICC so ineffective in stopping this and similar horrors?]

Economics, Crony Capitalism

02.22 Trump’s Bogus Infrastructure Plan Takes the U.S. Further Down the Road of Rentier Capitalism

02.22 Plundering the Planet: Coca-Cola And Nestlé To Privatize The Largest Reserve Of Water In South America [When the public is ignored for profits, THIS is what could go wrong]

International & Futurism

02.25 Mueller investigation: Manafort accused of secretly funding European pro-Russia group

02.25 UN security council votes unanimously for month-long Syria ceasefire [why not a permanent ceasefire, have war crimes trials and then hangings!]

02.23 The fairest of them all: why Europe beats the US on equality

02.21 Netanyahu aide agrees to implicate PM over corruption claims – reports

02.21 Netherlands becoming a narco-state, warn Dutch police [instead of a totally criminal solution, why not develop safer, non-addictive prescription drugs to put dangerous narcotics gangs out of business]

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: