October 17, 2018

flaks who have probably never heard of Enron

German Government Was Under the Impression That a ‘Certified Audit’ Would Find a 55 Billion Euro Accounting Error

Most people are of the opinion that government can’t do anything right. Education? Bah. Economies? Duh. Wars? YEESH. Oddly, politicians are quite fond of mocking the inefficiencies and mistakes of government to better relate to the common folk who don’t put much stock in the government’s operations. This means that politicians must find other people to hold responsible for the mistakes that are happening all around them. This also means that the art of blamestorming is the most coveted skill in all of politics (well, maybe after being able to lie through your teeth). Do things right and you live to fight another day. Do things wrong and you just look like an ass and then have to weather repeated calls for your resignation.

The German government is taking a fair amount of shit for missing a 55 billion euro accounting mistake. This size of a boo-boo can’t really be swept under the rug so, right on cue, the finance minister has turned on the blamethrower full blast:

Finance Minister Wolfgang Schaeuble has summoned executives from the nationalized mortgage bank Hypo Real Estate (HRE) to explain how they made a simple accounting error that ended up raising Germany’s total debt load by 55 billion euros.Schaeuble, in the awkward situation of being humiliated by the windfall that will cut Germany’s debt levels, will also demand answers at a Wednesday meeting from the PwC accountancy firm that signed off on the report.

Schaeuble’s spokesman Martin Kotthaus tried to deflect any blame, saying the ministry received a certified statement from auditors that the balance sheets had been checked and approved. He said it was too early to tell exactly who messed up.

“It’s annoying, to put it diplomatically, when corrections of this dimension are necessary,” said Kotthaus, who was grilled at a news conference. “We had a certified audit of the annual accounts for 2010 and it said everything was in order.”

Right! A certified audit! If there’s anything we’ve all learned, it’s that audits are the one infallible stamp of approval that we can always turn to for confidence. Just ask Lehman Brothers. Or Satyam. Or Li & Fung. Or MF Global. Or Taylor, Bean & Whitaker. Or Koss. Or Countrywide. [breathe, breathe] Or World Capital Group. Or Sino-Forest. Or Colonial Bank. But aside from those, yeah, audits. Those things are solid.

Germany mocked for 55-billion euro bank accounts error [Reuters]