CapitalAccounting’s Weblog

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If anyone is looking for accounting news to add to your RSS feed, BizJournal’s got some good ones, which you can narrow down by topic or location.


August 19, 2008 Posted by | Uncategorized | Leave a comment

Accounting News

As the mortgage crisis continues, the Washington Post had some interesting coverage on The Financial Accounting Standards Board‘s decision to “postpone by a year a plan that could require banks and other financial services companies to raise mountains of new capital to protect themselves against financial exposures not currently reflected on their balance sheets.”

August 19, 2008 Posted by | Uncategorized | | Leave a comment

Accounting News

The Ann Arbor Business Review recounts how a local IT firm overstated its earnings by almost $130 million over four years, due to accounting fraud perpetrated by the company’s (now former) VP of Finance (and later, CFO), Scott Hirth. 

From the article:

“As part of his scheme, Hirth created false documentation to purportedly support the balances in the manipulated accounts. For example, Hirth’s account reconciliation spreadsheets contained ‘hidden rows’ so that false account entries were hidden when printed in hardcopy,” the SEC wrote in its complaint filed in the U.S. District Court’s Eastern District of Michigan. “Hirth also used ‘white font’ in these spreadsheets, which placed false information in white-color text so that they were invisible.”

As if his white collar, er white-color, tactics weren’t offensive enough, Firth apparently authored numerous notes outlining his concerns about “cooking the books” and even referenced the Enron and Worldcom scandals.

The Vancouver Sun reports on an accounting scandal at ICBC (a government -owned auto insurance corporation), in which ICBC employees bought and sold accident-damaged vehicles without recording the cost of repairs in the company’s books, to create the impression that the facility was meeting revenue targets on its vehicle salvage business.

Perhaps most disturbingly, PWC auditors found that, following an initial complaint, ICBC did indeed conduct an investigation.  However, in an astonishing display of disregard for internal controls, “the review was overseen and conducted by employees who had purchased repaired vehicles and/or had their vehicle worked on at the MDR&T facility.” 

Finally, relays that certain controls mandated by Sarbox might actually make financial statement fraud more difficult to detect, according to a new report from the Association of Certified Fraud Examiners.  Most notably, the report found (based on survey results and research) that at companies where management was responsible for certifying the financial statements, it actually took companies longer to detect financial statement fraud.

From the article:

“Internal controls are like locks on a door,” says Lance Randolph, a fraud expert at CBIZ Accounting, Tax & Advisory Services, and an ACFE member. “The more sophisticated a lock you have, the better a deterrent it is, but someone who is truly knowledgeable can defeat any internal control.”

July 23, 2008 Posted by | Uncategorized | , | Leave a comment

A welcome note

Welcome to CapitalAccounting, the blog about the accounting and finance life here in the DC metro area.  In the coming weeks, we hope to develop and add more content of interest to our readers.   

April 23, 2008 Posted by | Uncategorized | 1 Comment