Sometimes it’s weird reading a story about the Civil War. It’s the same when reading about an audit fiasco.
People do the oddest things.
As the first major battle of the war shaped up near Manassas Junction, lots of people rode out from DC in their carriages. They brought along picnic baskets so they could eat as they watched the battle. Would be a fun afternoon outing with the children.
Professor Dave Albrecht outlines the origins of public accounting and status today: Black Friday, Black Accounting, White Christmas.
Picture then: demand from customers (large companies) to providers (public accountants) for a value-added service (audit) the large companies wanted so they could differentiate from their competitors.
Fast forward 100 years.
Picture now: a self-protecting group of large firms that resist market needs and loud requests for change.
History and sad state of auditing covered in about 260 words, located in the middle part of the post.
Check it out.
Jonathan Weil compares the $13B settlement by JP Morgan to greenmail in his article, The JPMorgan Settlement Isn’t Justice.
After having read the settlement, he realizes this is worse than the typical case of neither admit nor deny guilt wording we usually see in settlements. In spite of the press releases from the government saying JPM admitted misrepresentation, the settlement and statement of facts is worded so vaguely that there aren’t actually any details of what the government believes was done wrong.
Thus, there is nothing to deny: Read the rest of this entry »
Fraud has tragic effects on innocent people who didn’t commit the fraud. The person who did the deed will pay a severe price far beyond what the judge imposes. Just like a stone thrown into a pond causes ripples all across the water, so a fraud ripples out to cause all sorts of harm.
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JP Morgan and the Department of Justice announced a huge settlement that covers a host of legal claims against the bank.
Price tag is $13 billion, but keep in mind that claims credit for $4B the bank separately negotiated with Fannie and Freddie. The Wall Street Journal report is J.P. Morgan, U.S. Settle for $13 Billion.
A few of the key terms: Read the rest of this entry »