Fleck: SEC Should Sue FASB

I often see eye-to-eye with Bill Fleckenstein. Hell, he is the one who urged me to write Bailout Nation; He even wrote the forward to it.

We may disagree on the perceived strength of the SEC vs GS case — but what we don’t disagree about is what the Financial Accounting Standards Board (FASB) has done to accounting standards.

As far as investors are concerned, they have eliminated them. There is essentially no oversight of companies by accountants any longer. Accounting statements are all but worthless.  Frauds like Enron, Lehman Brothers and Overstock.com are everywhere. Companies can hide risk from investors, misstate earnings without fear of reprisal, engage in any manner of deceptive gamesmanship.

There are many reasons to buy various publicly traded companies — but what they report in their balance sheets ain’t one of them.

Here’s Fleck:

The FASB and the dog that ate due diligence
The SEC also ought to consider pursuing the Financial Accounting Standards Board for helping denigrate accounting standards to the point that so much smoke and mirrors could pass for legitimacy.

Had real accounting standards been at work, they likely would have prevented the banksters from walking away with fortunes while they built financial instruments of mass destruction.

All too true . . .

Goldman-deal gamblers knew the score
Bill Fleckenstein
MSN Money, 4/23/2010

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