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by zero_intp 4617 days ago
While I agree that GAAP only vaguely represents reality, Management teams of all well run companies /DO/ think about formal financial statements.

These statements require thought or liability to potential jail time. In addition, the impact of these statements on financial markets (ie: stock price) is tremendous. Management damn well should be thinking about shareholder value.
1 comments
mistermann 4616 days ago
> liability to potential jail time

Are there any examples of this? It seems to me the SEC didn't make much use of all the archived emails (guaranteed to be in place due to SOX) during the 2008 banking crisis which makes me generally distrustful of these formal written rules.

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asmithmd1 4616 days ago
Yes, WorldCom leaps to mind

http://www.accounting-degree.org/scandals/

They misstated costs as investments and were able to show big profits - for a while.

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mistermann 4616 days ago
While Worldcom is one incident where one(?) person was punished, it is from 2002, and from that page, it was following that incident that they enacted SOX, which afaik hasn't been used since. Or if it has, the incidents have been few and far between. I will continue to believe the system is rigged.
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