Professor Elam

No Accounting for the Pentagon

Thursday May 18

WASHINGTON—The Pentagon has overcounted the value of the weaponry it has sent to Ukraine by at least $3 billion, an error that could eliminate the administration’s need to ask Congress for more money to keep Kyiv in the fight this spring, people familiar with the situation said. 

The military services inadvertently used a higher value for at least some of the weaponry the Pentagon sent to Ukraine, using valuations for new equipment instead of the older gear pulled out of U.S. stockpiles, the people said.

 

The Pentagon, which has an annual budget of about $860 billion, has long been plagued by accounting errors and has never had a clean, departmentwide audit, most recently failing an external study by multiple firms last year.

An internal audit of the Ukraine transfers discovered the error in March, and officials said the newly identified surplus could obviate the Biden administration’s need to seek additional funding from Congress for next year. The Pentagon has earmarked more than $44 billion in military aid to help Ukraine defend itself since Russia invaded in February 2022, and the Pentagon says the error leaves it with $3 billion more to spend.

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“During our regular oversight process of presidential drawdown packages, the Department discovered inconsistencies in equipment valuation for Ukraine,” said Pentagon spokeswoman Sabrina Singh in a statement. “In some cases, ‘replacement cost’ rather than ‘net book value’ was used, therefore overestimating the value of the equipment drawn down from U.S. stocks.”

For example, the Pentagon overstated the cost of replacing the M777 howitzers it provided to Ukraine by looking at the price tag on the Himars mobile missile launcher system, a far more advanced system slated to succeed the older artillery pieces in the U.S. arsenal. Overall, that cost difference resulted in an overcounting of $75 million, a Pentagon official said.

Pentagon officials have previously said they would look to replace stocks with more modern versions of the equipment being sent to Ukraine, such as Javelin antitank missiles and the replacement for the Stinger antiaircraft missile, known as Shorad.

Musk Warns Against Weaponizing the Dollar

hursday April 27, 2023

The US is freezing foreign country assets on deposit here and blocking them from using hte SWIFT system.

The dollar became the world reserve currency at the 1944 hBretton Woods Agreement.

President Nixon's 1971 decision to abandon the the gold standard coupled wtih the dollar as the world reserve currency has resulted in massive dollar depreciation.

This is why the 16971 CHevy which cost  $3700 is now $37,000.  LBJ's first 100 B budget is now over $3 trillion, a number formerly only used in astronomy.

Asia Infrastructure Bank is another attempt to move away from the dollar.

Sadam Hussein had suggested substituting the EU for the Dollar in intl oil transactions, notice he then had his country invaded and is now dead.

 

 

EY Calls Off Split

Thursday April 13, 2023

 

         EY Breakup Plan Doomed by Miscalculations and Powerful Opponents - WSJ

• Accounting firm EY calls off 'Project Everest' to break up firm - BBC News

Silicon √alley Bank Update

Weekend March 12 2023

 

Ok guess who issued an all is well, no going concern warning just a couple of weeks before SVB collapsed, yep you guessed it

 

KPMG, I recieved this e mail from author Kurt Pany our undergrad audit author

 

We realize that this is probably more than you bargained for (particularly given our promise that we “will not deluge you with emails”), but things are happening pretty quickly.

 

The links below relate to the Silicon Valley Bank (SVB Financial Group) issues this past week. The date of its most recent audit report included in its Form 10-K is February 24, 2023, about 12 days before all the news started.

 

The first link is to that 10-K (in that document search for “In our opinion” to quickly locate the audit report). All this presents a wide variety of possible audit related discussion issues (critical audit matters, going concern, an illustration of an integrated report on the financial statements and internal  control, a 30 year client, etc.)

 

Following that are a couple links to articles (the Wall Street Journal one you may not be able to see if you don’t subscribe). If you wish, a quick Internet search will provide you with any number of alternate sources.

 

0000719739-23-000021 (d18rn0p25nwr6d.cloudfront.net)

 

https://www.wsj.com/articles/silicon-valley-bank-svb-financial-what-is-happening-299e9b65

 

Silicon Valley Bank collapse: How it happened (cnbc.com)

 

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As always, send any questions, inquiries, etc. to either (or both) of us.

 

Kurt and Ray

[email protected]

[email protected]

Disney Loses on Streaming Lays Off 7,000

Thursday Feb 9 2023

Even mighty Disney makes mistakes.

 

Disney’s streaming service, “Disney+,” lost 2.4 million subscribers and the company announced a massive restructuring, an earnings report released on Wednesday revealed.

The company claims their streaming service, which launched in 2019, lost 2.4 million subscribers. This total is not as severe as some analysts expected, as the streamer recently raised the price of its monthly subscription from $7.99 to $10.99, and were expected to lose more than three million subscribers, according to CNBC.

Disney also announced a massive restructuring which will seek to cut $5.5 billion in expenses and will result in 7,000 employee layoffs, Variety reported. The restructuring will reorganize Disney into three lanes: Entertainment, ESPN, and Parks, Experiences, and Products.

Accountant Shortage Sending Firms Overseas

Thursday Jan 19 2023

A national shortage of accountants is driving firms to hire overseas reports the WSJ.

Story in today's WSJ.

 

 

 

$31.4 Tillion and Counting

January 18 2023

US is spending 120% of its GDP.

That is the sort of thing usually associated with deadbeat countries like those in South America. I wonder if TeamBiden knows how many billions or millions are in 31.4 trillion.

 

Armanino the new Arthur Andersen

Fri Dec 2 2022

Armanino is the CPA firm which signed off on FTX,

click here to read the story.

PCAOB JHeads to Hong Kong

Friday Sept 16 2022

WASHINGTON—U.S. regulators could know by Thanksgiving if Beijing is complying with an agreement designed to allow Chinese companies to continue trading on American stock exchanges.

Inspectors from the U.S. Public Company Accounting Oversight Board are preparing to travel to Hong Kong to begin reviewing the audit files of publicly traded Chinese companies, Securities and Exchange Commission Chairman Gary Gensler told lawmakers Thursday. The PCAOB is a nonprofit created by Congress and overseen by the SEC.

The inspectors are expected to depart Friday and start work next week, Mr. Gensler told members of the Senate Banking Committee. The process would take eight to 10 weeks. “So we’ll probably know somewhere around Thanksgiving or early December,” he said.

Washington and Beijing reached an agreement last month to allow the PCAOB to inspect the audits of Chinese companies listed on U.S. exchanges, a 20-year-old requirement of U.S. law that China hasn’t met. The agreement, which came after a decadelong standoff between regulators in the two countries, created a path that could prevent some 200 Chinese companies from being kicked off U.S. stock exchanges in early 2024.

The agreement allows PCAOB inspectors to travel to Hong Kong or mainland China for inspections. When it was signed last month, PCAOB officials said the deal promised “complete access to the audit work papers, audit personnel, and other information we need to inspect and investigate any firm we choose, with no loopholes and no exceptions.”

China had previously denied U.S. regulators routine access to such documents on the grounds of national security. In a departure from that justification, China’s stock regulator said last month that audit working papers generally don‘t risk exposing state secrets, individual privacy, companies’ vast user data or other sensitive information.

U.S. officials welcomed the change of tone but have questioned if China will follow through.

“I don’t know if the Chinese are going to comply,” Mr. Gensler said Thursday, even though he said officials from China’s Ministry of Finance directly told him in video calls that they intended to.

Dennis Wilson Cashses in at Lululemon

Wed Sept 14 2022

Read this article to grasp just how much money can be made as an insidder