Stiglitz on Accounting tricks around the globe

[Ulhas Joglekar]

The Economic Times

TUESDAY, OCTOBER 01, 2002

Accounting tricks around the globe

JOSEPH STIGLITZ

The Arthur Andersen and Enron scandals in America have focused attention on
the problems of accounting in private businesses. But the scale of this
corruption should not blind us to the problem of public sector accounting,
where many deceitful things are also being done.

Accounting rules are designed to provide standardised frameworks within
which the financial position of a firm, or government, can be assessed. Bad
accounting frameworks always lead to bad information, and bad information
leads to bad decisions, with serious long term consequences. This is true in
the public as well as the private sector.

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