The accountant takes information and massages it according to accounting rules. if the information is false it is a job similar to an editor who improves a work of fiction. It remains fiction. Do not feel sorry for the banks. These loans improved their balance sheets so their stock goes up. These loans gave big bonuses to the execut…
The accountant takes information and massages it according to accounting rules. if the information is false it is a job similar to an editor who improves a work of fiction. It remains fiction. Do not feel sorry for the banks. These loans improved their balance sheets so their stock goes up. These loans gave big bonuses to the executives involved. These loans were given to a bankrupt known liar and fraudster. The only loss is long term to the bank shareholders, maybe. If we were serious about protecting the public and investors, then we would punish personally the accountants for not verifying information provided. and we would punish personally the bank executives who approve these loans. but that is obviously a fantasy as remember corporations are exempt from criminal charges for their decision makers. anyone remember Enron and its accountants?
Great stuff, Lola. What amazes me is that the banks trusted Trump's numbers when considering making him loans and did not do independent appraisals. That's on them.
I wonder if Deutsche Bank had lots of dark money laundered through Moldova Malta and Ukraine they they needed to “invest”? Read Putin’s People by Catherine Belton. Follow the rubles from their source in the collapsed USSR. Generations of hard working Soviet workers created great wealth only to be looted by the oligarchs and their enabling American and European business partners in “Londongrad” and other so called financial centers. Corruption breeds corruption in lightly regulated neoliberal capitalism. We are now reaping the bitter harvest of Trump and Brexit.
Lola Eons ago I was personally responsible for rating the credit of countries and companies worldwide. What was clear was ‘when the money was running,’ banks were often cavalier about documentation. They made money by lending money and the lenders looked askance at bank credit departments whose assessments of credit concern often were quietly filed. [I got extensive details of the merry-jig-of-compliance when I meet with Citibank’s credit EVP.]
When the stuff hits the fan, bankers are shocked rpt shocked. (While the banker-mortgage-mills in the early 2000s were extremely profitable, the top banks expressed no knowledge that they were shoveling s++t. Only one banker went to jail over this calumny, and he was a low-ranking guy in the processing department.
Deutsche Bank knew that they were dealing with ART OF THE DEAL Trump whose sleazy track record prompted all major NYC banks, except a greedy Deutsche, to blackball him.
The major accounting firms certify corporate financial statements and, when necessary, include a letter underscoring their concerns. For The Trump Organization Trump selected Mazar, a little-known Long Island accounting firm. Mazar obediently accepted figures provided by Trump and included their own statement that they were simply reporting Trump figures, not certifying them.
Now the legal issue is whether Trump is guilty of civil and or criminal fraud for his funny figures.
Mazars USA is the US arm of a very large French accounting firm. Per Wikipedia: "the Praxity alliance
With head offices in France, Mazars has a network of correspondent partners and joint ventures in a further 21 countries and is a founding member of the Praxity alliance, a network of independent firms." Mazars bought the Weiser accounting firm in 2010, per the Mazars USA website.
Tom Thanks for your update on Mazars. I had accepted the media impression that Mazars was a small Long Island-based accounting firm. It seems that a number of green-eye-shaded folks must be nervous now that Mazars is in the public spot light. Not a good image for a ‘reputable’ accounting firm. firm.
Ashley Shhhh! I am slipping out 'secrets' surreptitiously. When I told the Bank of England that I would not permit them to issue British bonds on the New York financial market, I then carefully scurried out amidst a host of yeomen with fearsome pikes. I also vividly remember what happened after I got on the Nixon White House Enemies List.
I can't see how the accountants can get out of any legal issues here. Isn't the reason we pay them the big bucks is their assurance that what they sign off on is correct? How, after all this time, can they say oops, and have no responsibility?
It looks to me like the difference between a review and an audit. In my experience as a client, a review means the accountant takes information provided by the client and provides a report saying that the information has been read and organized in accordance with standard accounting principles. In an audit, an accounting team actually goes into a business and goes through files to corroborate the numbers provided by the client. It's the same process as the IRS auditing a tax return, and it's more expensive and time-consuming than a review. I can't see the Trump org shelling out the money for an audit to ferret out information they don't want to provide lenders.
Good points, thanks for your insight. Your last sentence is spot-on in my opinion "I can't see the Trump org shelling out the money for an audit to ferret out information they don't want to provide lenders."
You make a good point. Let me extend it a bit. In a "review", the accountant IS obligated to ask questions of the client about the numbers before issuing his/her report. They are not, however, required to verify the numbers through any added analysis or third-party evidence. In a "compilation", they take the numbers at face value, and disclaim ANY opinion about their accuracy or veracity in their compilation report cover letter. They ARE supposed to state, however, that the figures have been compiled and presented in accordance with GAAP (Generally Accepted Accounting Principles). That puts them on the hook with respect to Donny's crimes.
The Enron scandal caused the death of the accounting firm involved - Arthur Andersen & Co. One of America's eight largest accounting & consulting firms - dead in under a year.
The Enron- killing of Arthur Anderson [the court reversed the ruling after the fact] was part of the reduction of the “Big Eight” to four or less.Now the SEC is more circumspect to killing accounting firms. Moreover, Mazar is a little fish and, from what I read, did nothing patently illegal, though it wiggled like a frightened eel.
The accountant takes information and massages it according to accounting rules. if the information is false it is a job similar to an editor who improves a work of fiction. It remains fiction. Do not feel sorry for the banks. These loans improved their balance sheets so their stock goes up. These loans gave big bonuses to the executives involved. These loans were given to a bankrupt known liar and fraudster. The only loss is long term to the bank shareholders, maybe. If we were serious about protecting the public and investors, then we would punish personally the accountants for not verifying information provided. and we would punish personally the bank executives who approve these loans. but that is obviously a fantasy as remember corporations are exempt from criminal charges for their decision makers. anyone remember Enron and its accountants?
Lola, you just gave us a college seminar in banking. No wonder I don’t trust ‘em. Thank you.
Great stuff, Lola. What amazes me is that the banks trusted Trump's numbers when considering making him loans and did not do independent appraisals. That's on them.
In terms of money "donations" the financial services lobby is larger than all other lobbying groups combined.
I wonder if Deutsche Bank had lots of dark money laundered through Moldova Malta and Ukraine they they needed to “invest”? Read Putin’s People by Catherine Belton. Follow the rubles from their source in the collapsed USSR. Generations of hard working Soviet workers created great wealth only to be looted by the oligarchs and their enabling American and European business partners in “Londongrad” and other so called financial centers. Corruption breeds corruption in lightly regulated neoliberal capitalism. We are now reaping the bitter harvest of Trump and Brexit.
O yes, Ukraine has had lots of corruption. I think Biden told them to clean it up.
Lola Eons ago I was personally responsible for rating the credit of countries and companies worldwide. What was clear was ‘when the money was running,’ banks were often cavalier about documentation. They made money by lending money and the lenders looked askance at bank credit departments whose assessments of credit concern often were quietly filed. [I got extensive details of the merry-jig-of-compliance when I meet with Citibank’s credit EVP.]
When the stuff hits the fan, bankers are shocked rpt shocked. (While the banker-mortgage-mills in the early 2000s were extremely profitable, the top banks expressed no knowledge that they were shoveling s++t. Only one banker went to jail over this calumny, and he was a low-ranking guy in the processing department.
Deutsche Bank knew that they were dealing with ART OF THE DEAL Trump whose sleazy track record prompted all major NYC banks, except a greedy Deutsche, to blackball him.
The major accounting firms certify corporate financial statements and, when necessary, include a letter underscoring their concerns. For The Trump Organization Trump selected Mazar, a little-known Long Island accounting firm. Mazar obediently accepted figures provided by Trump and included their own statement that they were simply reporting Trump figures, not certifying them.
Now the legal issue is whether Trump is guilty of civil and or criminal fraud for his funny figures.
Mazars USA is the US arm of a very large French accounting firm. Per Wikipedia: "the Praxity alliance
With head offices in France, Mazars has a network of correspondent partners and joint ventures in a further 21 countries and is a founding member of the Praxity alliance, a network of independent firms." Mazars bought the Weiser accounting firm in 2010, per the Mazars USA website.
Tom Thanks for your update on Mazars. I had accepted the media impression that Mazars was a small Long Island-based accounting firm. It seems that a number of green-eye-shaded folks must be nervous now that Mazars is in the public spot light. Not a good image for a ‘reputable’ accounting firm. firm.
The secrets you could tell!! I need no knowledge of the skeletons.
Ashley Shhhh! I am slipping out 'secrets' surreptitiously. When I told the Bank of England that I would not permit them to issue British bonds on the New York financial market, I then carefully scurried out amidst a host of yeomen with fearsome pikes. I also vividly remember what happened after I got on the Nixon White House Enemies List.
I can't see how the accountants can get out of any legal issues here. Isn't the reason we pay them the big bucks is their assurance that what they sign off on is correct? How, after all this time, can they say oops, and have no responsibility?
It looks to me like the difference between a review and an audit. In my experience as a client, a review means the accountant takes information provided by the client and provides a report saying that the information has been read and organized in accordance with standard accounting principles. In an audit, an accounting team actually goes into a business and goes through files to corroborate the numbers provided by the client. It's the same process as the IRS auditing a tax return, and it's more expensive and time-consuming than a review. I can't see the Trump org shelling out the money for an audit to ferret out information they don't want to provide lenders.
Good points, thanks for your insight. Your last sentence is spot-on in my opinion "I can't see the Trump org shelling out the money for an audit to ferret out information they don't want to provide lenders."
You make a good point. Let me extend it a bit. In a "review", the accountant IS obligated to ask questions of the client about the numbers before issuing his/her report. They are not, however, required to verify the numbers through any added analysis or third-party evidence. In a "compilation", they take the numbers at face value, and disclaim ANY opinion about their accuracy or veracity in their compilation report cover letter. They ARE supposed to state, however, that the figures have been compiled and presented in accordance with GAAP (Generally Accepted Accounting Principles). That puts them on the hook with respect to Donny's crimes.
The Enron scandal caused the death of the accounting firm involved - Arthur Andersen & Co. One of America's eight largest accounting & consulting firms - dead in under a year.
Tom
The Enron- killing of Arthur Anderson [the court reversed the ruling after the fact] was part of the reduction of the “Big Eight” to four or less.Now the SEC is more circumspect to killing accounting firms. Moreover, Mazar is a little fish and, from what I read, did nothing patently illegal, though it wiggled like a frightened eel.