Monday, December 19, 2005

Double-Dealing Corporate Crooks

Many years ago, when Bally Corporation was in the slot machine manufacturing business, I purchased sveral shares of stock in this corporation. Bally eventually got into the casino business and was subsequently taken over by the Hilton Corporation, which later established Bally Total Ftiness Corporation as a seperate entity. Bally Total Fitness has never paid any dividends on its stock. I just received its annual statement with all sorts of rosy predictions for the future. This report stated that it required an eighteen month efforrt "to correct past accounting errors" for the years 2000 through 2003, and that "it was a tremendously time consuming, complicated and costly task." Indeed, it cost several million dollars to correct these "errors."

Accounting errors, my ass! This is a relatively small company when compared to such giants as the former Enron Corporation. Since Enron's demise, there have been numerous news accounts of similar accounting and auditing shenanigans at many of America's corporattions. What in the world has happened to business ethics and integrity?

When corporations resort to "cooking the books" in order to show that they are doing much better than they really are, their accountants and auditors are, in effect, committing ROBBERY BY PEN. These false accounting reports are designed to encourage people to invest in these corporations. When these "accounting errors" are finally discovered, the stocks will "tank" and the poor suckers (investors) will end up losing money. The accountants responsible for "cooking the books" are nothing more than a bunch of double-dealing corporate crooks who deserve the same punishment as any other robbers. And the same goes for the auditors and the officers of the corporation who are aware of these illegal practices.

No comments: