FT reported the political Red Team may eliminate the accounting oversight board formed after the failure of Enron.
My grandfather was a former CEO of Price Waterhouse when the Big 8 accounting firms existed (with no consulting divisions). Financial reporting is now dominated by nonstandard measures like "adjusted EBITDA" and one has to search to find a GAAP income statement.
Today's CEO wanting to "do something" simply finds an accommodating lawyer, accountant and political insider to endorse their schemes. That is Trump's business playbook and apparently the Red Team likes it.
I went to the Public Company Accounting Oversight Board website and noticed enforcement actions. I saw KPMG had a number of actions and noted one for Price Waterhouse Singapore. The fines in those cases were noteworthy, $700,000 and $1.5 million.
I perused the most recent action against Adeptus Partners LLC. It's audit of Blockchain of Things had a number of problems.
Blockchain of Things raised more than $12 million worth of cryptocurrency assets through the Offering. According to a December 18, 2019 SEC Order (“SEC Order”), Blockchain of Things did not register its Offering pursuant to the federal securities laws, nor did it qualify for an exemption to the registration requirements.That $12 million was classified as a Token Refund Liability in 2020 but shifted to "deferred revenue" in 2021. The PCAOB found Adeptus accounting team:
"relied exclusively on management representations in concluding that the "Token Refund Liability" had been appropriately reclassified as deferred revenue.19 Further, the lead partner accepted management’s representations despite evidence that appeared to contradict those representations."The SEC settlement with Blockchain could well be today, given the number of issues. Blockchain of Things lasted until February 2023.
My wise friend wrote:
So Trump and his advocates keep "promoting Main Street over Wall Street." Explain to me how removing the cops on the beat in the financial markets, relaxing regulations & enforcement for crypto in the banking system and allowing private equity into Main Street 401K's helps any of his supporters in the belly of a normal distribution of incomes?
How do the tariffs, which will produce price increases, help these people? The tariff's hit long before the manufacturing base to support those items is even here.
Yet, he wants lower interest rates which will only affect the dollar's attractiveness. Maybe it will help asset prices go higher but that will only help private equity, asset managers, and the crypto industry. So our financially engineered economy goes from some fraud, to bubble type fraud, to complete BEZZLE?
I could see why those surrounding him would clap their hands for this but not Main Street. Explain to me how removing protections, protects? I guess the con is on. Which reminds me of a great quote.
“There are three kinds of men. Some people see an electric fence and will avoid it, other people have to touch it to learn, and still others have to pee on it," ― Will Rogers
The Reds want to neuter yet another financial policeman. An accounting firm enabled Enron to build and sell its house of cards as innovative and safe.
That may well repeat. Be sure to thank the fiscally insane, electric-fence peeing Red Team.
