Big corporations and companies are not the only ones who participate in accounting fraud.
There are many people who believe that U.S. Government is just as guilty as some of the other notable
companies to get caught with accounting fraud. Currently, the U.S. Government has their 2011 Budget
Compromise, which consists of $38 billion in budget cuts. The problem though, is that some believe it
is all by way of accounting gimmicks. Some believe that while $38 billion in budget cuts sounds good,
it really is not what it seems. The Associated Press stated that “last weeks hard-won agreement to avoid
a government shutdown and cut federal spending by $38 billion significantly eased the fiscal pain by
pruning money left over from previous years, accounting sleight of hand and going after programs
President Obama had targeted anyway.” Examples such as legislation which included $4.9
billion from the Justice Departments Crime Victims Fund, but that money was not going to be spent
this year anyway because it was in a reserve fund. Out of the $38 billion in total cuts, $18 billion
would be cut from mandatory programs, while the remaining $20 billion would be cut from domestic
discretionary programs. The $18 billion from the mandatory programs, known as “ChIMPS”, are
permanent programs, whose money they would lose this year, would be put back into their budgets
the next year anyway. One person, Joseph J. DioGuardi, a former congressman
and CPA himself, even compared the federal government's accounting practices to those of Enron's
back in 2003. One reason he believes this is so, is because the laws of the Securities Exchange
Commission and General Accepted Accounting Principles do not apply to the books of the United
States federal government. In comparing our nations federal government to Enron, DioGuardi says
“Our federal government's ability to manipulate it's accounts and budgets is similar in many ways to
what Fastow did at Enron to cook the books and manufacture earnings.”
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