Material Weakness in Financial Reporting

[vam29]

Why not get all the facts before rushing to judgement?

[Bigbee60]

I'm a CPA and worked for Deloitte on the GM account in the late 80's. I think GM had more control weaknesses then then now.

Material weakness in accouting for Income Taxes? Was GM supposed to have a crystal ball that said they'd have a perfect storm and lose so much that their tax loss credit carryforwards would never be realized? Never in the past has a corporation faced so many large write-offs of deferred credits. My current company has had only one loss in the last ten years and we even had to write-off some deferred tax credits this year given the expected economic environment the next few years.

Part of the problem is Generally Accepted Accounting Principals (GAAP) is so unwieldy that even Deloitte can't interpret it consistently from client to clinet and industry to industry. I wouldn't worry too much as IFRS will replace GAAP for large companies like GM in about three years and level the playing field with other non-US multi-nationals like Siemens, etc.

Deloitte is playing CYA here ... I'm not too worried.

[fastball]

Get that axe sharp enough yet, Buickman?

[Buickman]

Originally Posted by Bigbee60

I'm a CPA and worked for Deloitte on the GM account in the late 80's. I think GM had more control weaknesses then then now.

Material weakness in accouting for Income Taxes? Was GM supposed to have a crystal ball that said they'd have a perfect storm and lose so much that their tax loss credit carryforwards would never be realized? Never in the past has a corporation faced so many large write-offs of deferred credits. My current company has had only one loss in the last ten years and we even had to write-off some deferred tax credits this year given the expected economic environment the next few years.

Part of the problem is Generally Accepted Accounting Principals (GAAP) is so unwieldy that even Deloitte can't interpret it consistently from client to clinet and industry to industry. I wouldn't worry too much as IFRS will replace GAAP for large companies like GM in about three years and level the playing field with other non-US multi-nationals like Siemens, etc.

Deloitte is playing CYA here ... I'm not too worried.

Deloitte, the same outfit that was auditor for Parmalat. remember them? the European conglomerate that imploded with a $5 Billion Cayman Island cash account that DID NOT EXIST? we've had the same audit company for over 70 years, hardly the appearance of an arm's length relationship. how about the Jersey car dealer McNamara who burned us for $400 Million in vans which did not exist? where was your beloved Deloitte then?

Deloitte was found guilty of dereliction of duty regarding Adelphia.

before anyone heard of Enron, Just For Feet, a Super Bowl ad running shoe store chain went from a market cap of $700 Million to ZERO in three years with Deloitte's accountants on watch. Deloitte's consulting arm hit the company up for business to fix it's internal control problems. can you say "conflict of interest?" instead of blowing the whistle, they sought additional business.

[Bigbee60]

Originally Posted by Buickman

where was your beloved Deloitte then?

I never said "beloved".

I was counseled out because I would not pass on Related Party testing for the same Adelphia you mention - 15 years before the fraudulent events took place, but the same issues were there then - that the Rigas brothers were transferring money out of the public company to buy golf courses and the Buffalo Sabres.

[Buickman]

" I had concluded that GM's problems were not just the result of ten years of bad luck but of thirty years of bad corporate culture in which the middle and upper management had become so self assured, so complacent, so arrogant that they thought they were beyond the reach of the competition and even the external environment"

Elmer Johnson, former Board memeber and Vice Chairman

for more on Corruption vs. Ineptitude at General Motors see my powerpoint presentation to GM shareholders from 2004

http://www.generalwatch.com/flash/GM04.html

[AMERICA 123]

INCOMING !

http://www.ft.com/cms/s/07cb8b1a-275...nclick_check=1

Top banks call for relaxed writedown rules

By Francesco Guerrera in New York and Jennifer Hughes in London
Published: May 21 2008 23:04 | Last updated: May 21 2008 23:04



The world’s leading banks have stepped up pressure to relax controversial accounting rules with a new plan aimed at breaking the “downward spiral” of huge writedowns, emergency fundraisings and fire-sales of assets.


The proposals on “fair value” accounting by the Institute of International Finance, an alliance of 300-plus companies chaired by Josef Ackermann, Deutsche Bank’s chairman, would enable financial companies to cushion the blow of financial crises by valuing illiquid assets using historical, rather than market, prices.

[Buickman]

Originally Posted by AMERICA 123

INCOMING !

http://www.ft.com/cms/s/07cb8b1a-275...nclick_check=1

Top banks call for relaxed writedown rules

shades of Roger Smith. simply proclaim that warranty expenses will be lower and book additional profit, pad the bottom line, and raise executive compensation. at GM it really wouldn't matter now if accounting rules changed since, according to Annual Report disclosures, our financials are not to be trusted anyway as Red Ink Rick doesn't follow the rules we have now.