Closing the books… or not?
With the firing of its auditor, more news on Fannie Mae’s accounting practices:
Auditor KPMG LLP found problems in the way Fannie Mae was compiling its financial results as recently as the quarter that ended Sept. 30, when the giant mortgage funding company was under a regulatory microscope, Fannie Mae disclosed last night. KPMG had previously given Fannie Mae clean audit opinions. However, in the September report, OFHEO alleged that KPMG had expressed concern internally about some of Fannie Mae’s accounting practices, such as the company’s decision to delay recording $200 million in expenses in 1998. The delay increased Fannie Mae’s profit, enabling top executives to receive millions of dollars in bonuses.
This feels like an information wave that is just beginning to swell.
