You will likely see another wave of financial collapse as auditing standards were lessoned in favor of “paid for better opinions”. But this doesn’t matter anymore because some financial companies are somehow able to see through to lend to the better companies. Somehow there is money for the good companies in spite of how much is siphoned to the investment bank and brokerage employees.
The Discount brokers have been found to have traded against customers via a third party in order to siphon money out of the country in the form of bonuses. But that is not what I am talking about in this article. I am talking about the separation of auditing and accounting functions. And the only way to ensure this is to outlaw them from being under the same umbrella. Why? Derivatives were the major cause of the financial crisis. The accountants who accounted for these on the balance sheet were often advised by the auditors. The auditors failed to identify this as the source of risk that almost sent the whole country into a depression. Where the auditors bamboozled? Were they bought? Or more likely did they not understand risk? And how much weight does an auditors statement as a going concern weigh on the average investor? I would argue the small investor has no knowledge of what an opinion of going concern means. So then what purpose does a negative statement regarding the ability of a corporation to continue as a “Going Concern” do for the heartland of America and its investments? It serves to have them have less confidence in their own abilities. I negative statement of going concern or insider information is often leveraged against the small investor to his detriment and to the detriment of the middle class. And every auditor knows that the statement of going concern is rarely read by the small investor.
What happened to create this lack of oversight in our financial system? Wall Street Republicans who lacked competence and by this I mean the lack of well rounded and informed opinion developed through experience and responsibility also lacked the experience and responsibility of capital allocation and this is a bad mix. In other words our investment bankers cared only for their own bank accounts at the expense of a present time that could have already been better if they were better people. Wall Street’s presence today only gives us a sense of how things were better or nostalgia and dim hope for better tomorrow’s.
Banks could have funded alternative energy projects but their own incompetence regarding investment and oversight proved to be the risk no one could have ever anticipated. In other word the technology has been there for 40 years but the logistical understanding and planning with regard to this was never developed or conceptualized as being needed. Why be clean when polluting black dirty oil is plentiful? The answer is simple; power requires a proactive responsibility for our future. I can guarantee you that the “Oil Party” or any of their funded and so called “Think Tanks” never cared to think this way? Why not? Because this kind of thinking is developed through true caring and that is not how they think. Their thinking and minds will always be reactionary based. And do not be fooled into thinking china can get thousands of years from re-refining spent nuclear fuel. If they could would they really be investing numbers approaching the trillions on solar energy? Well in truth they might be because Nuclear energy is inherently risky.
Thomas Paul Murphy
Copyright 2011 Thomas Paul Murphy
Originally published on 03 06 2011 at: http://www.themilwaukeeandwisconsinnews.com/
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