Friday, May 18, 2007
Treasury Secretary Paulson is concerned about the large number of restated financial statements -- 1.876 in 2006 -- and has set up a group to study the matter. "When you have 1,500 or so restatements in the course of a year, this is confusing to investors and tells us that the system isn't working the way it needs to be," he said. Certainly, no one would disagree with that statement; the problem is that Paulson's solution is to relax accounting rules and limit the liability of accounting firms. The group he appointed does have strong leadership; it is headed by former SEC Chair Arthur Levitt (who has previously written about the intense lobbying efforts from the accounting industry he experienced at the SEC) and former SEC chief accountant Donald Nicolaisen. WSJ, Treasury Targets Financial Fixes.