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Two Sets of Books
It really wont surprise any one that companies do have two sets of books, one for the tax inspector and one for the banker. Some may keep a 3rd for internal control. This was what I learned, not during my MBA degree, but soon after I graduated.
I had to do it (or simply not disapproved it) when my company was about to apply for a listing in the stock exchange. I could have waited for another two years but if I did, I wouldn't have the honor to approve the accounts in two years' time. I would have been sacked well before it. In those days when substantial more money were made in LPOs than in a company?s core business, getting listed in the shortest possible time was the one and only one mission of the firm. 'Harvest' was the word we used to refer to listing.
After the listing, there was even more pressure to cook. Basically, one doesn't want to scare the shit out of the investors in bad times and there is always the need to keep some reserves in good times. The whole picture is never revealed. Just in case.
There was one thing I knew. I shouldn't and couldn't hold any public offices. The question of integrity would inevitably come into play in running a public office. I would no longer be accountable only to the shareholders of a company but to the general public as a whole. Of course, there would always be concern about people starting to dig into my past if I were lucky enough to get elected to a respectable public office.
Every businessman cooks his books. It?s only a matter of extent. If my auditor didn't see the same grey areas as I did, he would be out of the door in no time. And if they couldn't find a 'legal' way of doing it, they would be out too. How far one can push the auditor really depends on the size of your company - no one cares too much about the disgraceful auditing fees. What matter is the side business.
This is why businessmen shouldn't get involved in key civil services. They don't have the integrity.
Integrity. It may sound a little unfair for Mr Bush. But the truth of the matter is as President of the United States, the most respectable and powerful position in the world, the question of integrity should never never be brought up. The issue about Harken might just be smoke (however unlikely it is as I have yet to meet a single businessman who doesn't cook (or season) his books) but no, the importance of his position does dictate ZERO tolerance. (not the smoke from a smoking gun we heard from the administration but the smoke in No Smoke Without Fire).
''It's legal, but God, it smells rotten,'' said Bill Coyle. I won't question the legal part. There has to be ways to do the cooking 'legally' or we would all be in jail. But one can never overcome the moral part. So should you feel good if you can evade taxes 'legally'? Should you feel good if you can cheat your investors without breaching the laws?
One just has to make up his mind earlier on in his career. Be a successful businessman or be a respectable civil servant. They just don't mix!
And I wouldn't be talking about business ethics here if I were still in the game. "Business ethics" are words reserved for the retired.
And don't think that its only people in the business world who are fond of cooking, the army too: 'I firmly believe ...'. Fully convinced after 10 long years of deliberation? Happy cooking.
Posted on October 14, 2002 01:22 AM
Categories: General
,The Ugly
,Work
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