--- Carl Remick <carlremick at hotmail.com> wrote: > >
>Score
> one for Lenin, I say.
>
Score a half a point either side. Need to be clear about the distinction between accountancy and audit. Standards of auditing have improved immeasurably since Lenin's day (mainly due to improved technology of record-keeping), and it is considerably harder to conceal managerial peculation and self-dealing. The actual accounting standards, however, have gotten further and further removed from real transactions -- the standard of what owners are prepared to count as generation of surplus by managers has been debased. The Lucent, Cisco, etc, etc scandals have been qualitatively different from the scandals of yesteryear, as they have all tended to involve aggressive accounting policies which count such grunge as service contracts, capitalised marketing expense, etc as if they were as good as cash. Then the owners find out what is going on, and have a fit of the vapours.
The interesting thing is that the relationship between those scandals and the sort of thing that Lenin was talking about. The managers aren't trying to expropriate value from the owners by using dodgy accounting policies; they're just trying to artificially boost the share price. But artificially boosting the share price *counts* as value expropriation, given that the management of these companies are loaded up with stock options. So they're taking value from the system as a whole, rather than their employers as specific owning individuals ... christ, I can see how people get driven to dialectics.
errrr .. yeh.
dd
===== “It is necessarily part of the business of a banker to maintain appearances and to profess a conventional respectability which is more than human. Life-long practices of this kind make them the most romantic and the least realistic of men” -- JM Keynes
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