[April 1, 2011 special edition] In a surprise move, SEC Chair Mary Schapirouette announced that she has directed Leslie Sidewoman (Financial Accounting Standards Board) and Sir David Tweetybird (International Accounting Standards Board) to start work on converging to Cash Basis Accounting.
Schapirouette told The Summa, “Last night I was watching a fascinating History Channel special on accrual accounting. Cruel accounting has been a fail because it’s a lot easier to manipulate financial statements by making up fake adjusting journal entries than to have real cash transactions.” She added, “Hey. It almost worked for Lehman Brothers and we think it will almost work for us.”
Personally, I like the move. I’ve started designing a new course titled REPO 101.
Leslie Sidewoman said, “The new rules will be called Greenbacks, because going green is so trendy these days.”
Sir David Tweetybird wondered if the move would get bogged down in controversy, “This could be another attempt by the Americans to take over international accounting. The SEC proposal is conditioned on U.S. Dollar Cash Basis Accounting. We think there should be a place for European cash equivalents.”
Debit and credit – - David Albrecht