Floyd Norris 2008. Loophole Lets Bank Rewrite The Calendar. New York Times, March 7, Late Edition (east Coast).
The New York Times writer and author Mr. Floyd Norris discussed a rarely-used international accounting standard or practice, known as the "true and fair" provision. During this article Norris is current, direct and authoritative, noting the reaction of other companies to Societe Generale's use of this type of a provision. The International Accounting Standards Board (IASB) writes these rules and standards, but there is not an international organization with the power to enforce these types of laws. Since the Societe Generale has come under a vast amount of scrutiny, because this company is using the rule unethically to disperse its losses over the two years in discussion, instead of one year. This dilutes the effect of a poor year financially, and can be considered earnings manipulation, according to the author. The accounting method employed by Societe Generale was approved by two of the biggest accounting firms in the world, Ernst & Young and Delloite & Touche. The author is very critical and clearly has vast knowledge of this subject, concluding that investors across the world should be worried about the unethical, though currently legal, accounting practices employed by Societe Generale.
After critically evaluating these type of activities in international markets and interests of investors, lenders and companies’ one can conclude that these types of activities are becoming increasingly common globally, the Securities and Exchange Commission should increase its involvement in a number of forums to develop a globally accepted, high quality financial reporting framework. In regulatory efforts, at both a domestic and international level, these type agencies need to consistently have a non-biased view that the only way to achieve fair, liquid and