After Greece now Hungary Admits: We Cooked The Books

Jun 4 2010,
There's a saying I've heard from accountants: recessions uncover what auditors can't. When a company has reasonable cash flow and access to credit, dodgy practices can be hidden for quite some time. But when sales dry up and banks tighten the purse strings, eventually companies are forced to admit that there is no money in the till.

That's why recessions always seem to be accompanied by revelations of terrible accounting practices, which makes a lot of people think that an epidemic of dishonest accounting must have brought the economy to its knees. But there's not much evidence that accounting practices actually get worse at the end of booms; it's just that companies who might have gotten away with it and eventually made enough money to repair the hole in their balance sheets, instead are forced to disclose what they've done.

I supect that this is also the case with the emerging epidemic of governments who cooked the books. Hungary is the latest culprit, and its official pronouncements are starting to sound, well, worryingly Greek:
The previous government, which pledged to narrow the budget gap to 3.8 percent of gross domestic product this year, "manipulated" figures and "lied" about the state of the economy, Szijjarto said. A fact-finding panel appointed by Orban's government will probably present preliminary figures on the state of the economy this weekend, Szijjarto said. The government will publish an action plan within 72 hours after the committee reports its findings, he said.

"We need a clean slate to formulate our economic action plan, and the fact-finding committee will provide just that."
Thankfully, Hungary's debt-load is not as high as it was in Greece. But we can't rule out the possibility that more of these "earnings restatements" may be coming down the road, as governments run out of creative ways to fudge their figures.
Source: The Atlantic

By: Megan McArdle - Megan McArdle is the business and economics editor for The
Atlanti
c. She has worked at three start-ups, a consulting firm, an
investment bank, a disaster recovery firm at Ground Zero, and the Economist.

Views: 63

Comment

You need to be a member of 12160 Social Network to add comments!

Join 12160 Social Network

"Destroying the New World Order"

TOP CONTENT THIS WEEK

THANK YOU FOR SUPPORTING THE SITE!

mobile page

12160.info/m

12160 Administrators

 

Latest Activity

Sandy posted a photo
55 minutes ago
Doc Vega posted a blog post
11 hours ago
Saint Quinn favorited Burbia's video
yesterday
Doc Vega posted blog posts
yesterday
Burbia commented on tjdavis's blog post The Jewish Couple That Taught Bob Dylan Hebrew and Introduced Him to Zionism
"Haaretz put this story behind a pay wall. Sali Ariel and Terry Noble were the names of the couple…"
Wednesday
William Heckman is now a member of 12160 Social Network
Wednesday
cheeki kea commented on tjdavis's photo
Wednesday
cheeki kea commented on cheeki kea's video
Thumbnail

This Woman DESTROYED Harley-Davidson's Future Forever

"It's a sad day on the highway. But I guess the show must go on. Watch out for the ruination of…"
Wednesday
cheeki kea posted a video

This Woman DESTROYED Harley-Davidson's Future Forever

This Woman DESTROYED Harley-Davidson's Future ForeverWelcome to Ride Radar – Your Frontline Source for Motorcycle Deals, Trends & Market Mayhem.Looking for t...
Wednesday
tjdavis posted a photo
Wednesday
Burbia posted a status
"Who knew releasing the MLK files and literally deflecting, it ends up implicating himself with the Epstein Files."
Tuesday
Burbia posted a video

Dan Bilzerian DEMOLISHES MAGA Nutjob Patrick Bet-David on His Own Show

Watch as two powerhouse personalities collide in this no-holds-barred debate on one of the world’s most contentious issues. Patrick Bet-David, known for his ...
Monday
Doc Vega's 7 blog posts were featured
Sunday
tjdavis's 2 blog posts were featured
Sunday
Less Prone favorited tjdavis's blog post Track AIPAC
Sunday
FREEDOMROX's blog post was featured

MRNA VACCINES: Question

Hello my fellow sojourners,I know it has been five years since the Plandemic, but one question has…See More
Sunday
Less Prone favorited FREEDOMROX's blog post MRNA VACCINES: Question
Sunday
cheeki kea commented on cheeki kea's photo
Jul 19
cheeki kea posted a photo
Jul 19
Doc Vega posted blog posts
Jul 18

© 2025   Created by truth.   Powered by

Badges  |  Report an Issue  |  Terms of Service

content and site copyright 12160.info 2007-2019 - all rights reserved. unless otherwise noted