I’ve written about them before…
But here we go again. In today’s FT:
GE must restate earnings again
“General Electric has been forced to restate earnings for the second time in 18 months after US regulators objected to the way the conglomerate had accounted for complex derivatives instruments.
The decision by the Securities Exchange Commission will reduce GE’s earnings by only a small amount between 2001 and 2006 but it is a setback for a company that prides itself on high standards of internal control.
Since the introduction of tighter rules on derivatives accounting in 2001, more than 200 US-listed companies have had to revise earnings. However, the occurrence of two restatements in a short period at GE underlines the difficulties faced by multinationals in keeping pace with derivatives markets and their regulation.”
Francesco, mi chavo, I am disappointed. Blame the regulators for the fact that poor, little, lacking in staff and expertise GE can’t keep up.
My response to that? If you can’t do it right, don’t do the business!
In other words, if business has gotten too complex, if they don’t want to spend the time, money and resources to do it right, then maybe they should simplify their business and stick to the basics. Maybe the regulators should look at the ability of GE to absorb a business as large, as complex and as important to public health as Abbott’s Diagnostics business. If they can’t handle the financial implications of their existing businesses, do we want to allow them to get into a business with more exposure to public safety, more reporting requirements to the FDA, more billing to Medicare…
You get my drift.
This was the last straw for KPMG, their auditors, who the FT reporter says GE claimed gave them the ok on the “incorrect” treatment. I predict they will dump KPMG soon for one of the others, probably Deloitte, (who are Abbott’s auditors and actually just their former Arthur Andersen auditors who moved to Deloitte after AA disappeared.)