Hi Harry, At 00:39 09/08/02 -0700, you wrote: >Keith, > >You are so poor at answering questions, I like to help out a friend. Just >the way I am, I guess.
Gosh! I'm so grateful. >A smidgen more seriously, perhaps someone lower down - as you suggest - >perhaps the contact with Anderson, who surely are culpable, might get the >axe. But, it seems to me that Lay and some of the others on top can plead >simply that they were fooled too. They knew nothing of the reality of the >situation. That's what Lay will plead, of course. But, this is only for the punters. Or, as Queen Victoria once said: "Tell that to my Marines". As the CEO of a MNC (albeit with one millionth of Enron's turnover), and the Chairman of another (with one thousandth of Enron's turnover), let me let you into a little secret (which I share with, probably, most other CEOs and Chairmen who are themselves not accountants): The reams of stuff that accountants produce every year are a complete mystery! However -- and this is a very big however -- any CEO worth his salt knows at any one time, and with great accuracy, exactly what his/her turnover is, also basic overheads, variable overheads, tax demands, what's in the current cash account at the bank and what's in reserve accounts (or cash owed). Any CEO who says that he doesn't know what the true situation of his company is at any instant of time is either an idiot or a liar. Kenneth Lay probably didn't know the full details of all the scams that were going on but he would have known what sort of scams they were and the extent of them in toto. >The Anderson situation I don't understand. The IRS keeps tabs on accounting >firms. Accountants have been turned from serving their clients to serving >the IRS. This was done by making them responsible for errors on the balance >sheets. Whereas in the past, they would try a few things, knowing that all >that would happen was an IRS denial, now that they're responsible - they >don't try them. That's my understanding. That's roughly correct. Concerning small and medium-size accountants, the IRS rate them as to the rigour which they use on their clients' accounts. The accounts sent in by "approved" accountants sail through without much, if any, further checking by the IRS. Those accountants which are not looked upon favourably stand the risk of having their clients' accounts looked at in detail. The Big Four (Andersens, as was, among them) would undoubtedly have had full "approved" rating and, because Enron's acounts were so vast and complex, and because Andersen accountants were probably a great deal smarter than the typical IRS tax inspector, then Andersen probably got away with murder for years. But no matter how clever the accounts are, at the end of the day it's cash that counts. It's either there or it's run out. Keith ---------------------------------------------------------------------------- -------------- Keith Hudson,6 Upper Camden Place, Bath BA1 5HX, England Tel:01225 312622/444881; Fax:01225 447727; E-mail: [EMAIL PROTECTED] ________________________________________________________________________
