Uncle Sam, for all his righteous indignation, is, in fact, the father of all deceptive accounting.
Other frequently cited problems include deceptive accounting of earnings; failure to rotate accountants, to assure that audits are impartial; and the establishment of takeover obstacles that keep shareholders from receiving maximum value.
A contrarian by nature, Mr. Chanos researches companies, pores over public filings to sift out clues to fraud and deceptive accounting, and then decides whether a stock is overvalued and ready for a fall.
Take Sino Forest, a forestry firm listed in Canada, whose shares slumped from C$25.30 ($26) in March to as low as C$1.99 in June after a research outfit questioned its accounts (Sino Forest has denied the claims and has commissioned a review by an independent committee).A sharp fall in a company's share price after allegations of deceptive accounting is hardly unexpected, except perhaps in China.
WorldCom holds the record for the most deceptive accounts, to the tune of an estimated $11 billion over several years.
WorldCom is the holder of the record for the most deceptive accounts, to the tune of an estimated $11 billion over several years.
"We talk about deceptive accounting practices," said Senator Carl Levin, Democrat of Michigan, in an interview yesterday.
Though no big company in Europe has yet been driven into bankruptcy by deceptive accounting, Mr. Bolkestein said, "you should never rule out the possibility of a WorldCom situation occurring here".
In this week's issue, Philip Gourevitch, in "Debt and the Salesman," chronicles the roller-coaster career of Bill Bartmann, the Tulsa, Oklahoma, businessman whose debt-collection business, Commercial Financial Services, made him a billionaire in the mid-nineties, before it was brought down by suspicions of deceptive accounting practices.
They pointed out that most institutional investors were hoodwinked by WorldCom and Enron with deceptive accounting.
The deceptive accounts have also modified their tactics to mask their identities.
