Re: [CANSLIM] WCOM restatement

From: Spencer48@aol.com
Subject: Re: [CANSLIM] WCOM restatement
Date: Wed, 26 Jun 2002 09:28:29 EDT

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Tom:

     I've heard on TV that it wasn't a "deviation" from GAAP.  From what I 
understand, there are options that an accountant/bookkeeper can use, and 
Anderson chose capital expensing what normally would be a regular expense 
item.

     In my opinion, it was just a matter of time before such horrendous 
manipulation of any company's books was discovered (The question isn't why 
did it take so long to discover, but rather, what company will be the next to 
reveal that they falsified records.  And I wouldn't be at all surprised that 
there are a lot of them out there.)  

     Unfortunately, accountants have learned from lawyers how to obfuscate 
the truth and maneuver the justice system in order that lying can be put in 
the best possible light, and truth and accuracy can be avoided.  That's why 
GAAP (I believe) covered up (instead of revealing) WorldCom's problems.

     As for CANSLIM:  I wonder how WON believes we can now fundamentally 
analyze a company-especially after its been revealed that WorldCom's 
Cash-Flow is bogus.  A few weeks ago, WON said: Look at the cash-flow to see 
that earnings are really funneling down-into the bottom line.  Now what's he 
going to say?  Probably, look at the managers of the companies to see if they 
have a history of dishonesty.  

     Unfortunately, though, I don't believe that will cut it.  Even if the 
manager is scrupulously honest, Enron and WorldCom teach us that that is not 
enough.  The ACCOUNTANTS also must be honest.  So now will WON's injunction 
be to:  Look at the history of the accounting firm, and the history of the 
accountants employed by the accounting firm, who work on the company's books?

jans




In a message dated 6/26/2002 12:53:51 AM Eastern Daylight Time, 
stkguru@bellsouth.net writes:

<< once again, Andersen strikes again, this time by signing off on Worldcom
 hiding over $3 billion in expenses as capital expenditures, and thus
 inflating cash flow. Restatement expected to take away last five quarters of
 profits and turn them into losses.
 
 Who gave this sanction to a deviation from GAAP (Generally Accepted
 Accounting Principles)?? >>

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