Delotte is an international accounting firm that, in recent years has been trusted by the United States government with providing technical advice to the Afghan banking system. This trust was miss placed. The United States government has had to terminate part of its contract with Deloitte due to the fact that they failed to report obvious signs that Kabul Bank, Afghanistan’s largest financial institutions, was having troubles. This decision was made by the United States Agency for International Development to try to avoid another incident like the one that accrued with Bearing Point.
Bearing Point was Delottes predecessor. Both of these companies were providing little help to a struggling Central Bank that was trying to figure out what was going on with Kabul Bank. As it turned out there was a major problem at Kabul Bank. Over $850 million had been fraudulently diverted to insiders. This was done by giving out loans that should not been given out to the Kabul Bank insiders. These loans made up about 94 percent of the loans that were outstanding for the bank, this nearly made the bank go under. It is possible that Delotte, and Bearing Point before that did not know about these fraudulent acts but it was their job to be looking for just this kind of thing. There were many red flags that were simply overlooked when they shouldn't have been. It is thought that these red flags had been popping up for over two years with no action being taken.
There may also be other reasons that Delotte failed to report these red flag situations. One possible reason is because the members of the team that would have discovered them could have been scared for their lives. It might sound a little out there to think that accountants would have their lives threatened but it’s not. People will do crazy things when there is that kind of money on the line. Also the fact that it is taking place in a war torn country that is full of terrorists makes it start to seem believable. The main reason I believe this could be the real reason for these people to stay quiet about what they find is because it would not be the first time it has happened. In 2008 when Bearing Point was still on the job one of its advisers to the Central Bank had his life threatened more than once to try to keep him quiet.
Most people think that accounting is a boring job that is all about pushing papers and most of the time it is. There are those occasions though that can get an accountant in a lot of trouble such as this one. When an accountant has to make the choice if he/she should do what is right or wrong no matter what the circumstances are, that is when their true morality shows through. Having moral accountants that can be trusted to the right thing is very important because of the impartments of honest accounting to the world’s economy.
Bearing Point was Delottes predecessor. Both of these companies were providing little help to a struggling Central Bank that was trying to figure out what was going on with Kabul Bank. As it turned out there was a major problem at Kabul Bank. Over $850 million had been fraudulently diverted to insiders. This was done by giving out loans that should not been given out to the Kabul Bank insiders. These loans made up about 94 percent of the loans that were outstanding for the bank, this nearly made the bank go under. It is possible that Delotte, and Bearing Point before that did not know about these fraudulent acts but it was their job to be looking for just this kind of thing. There were many red flags that were simply overlooked when they shouldn't have been. It is thought that these red flags had been popping up for over two years with no action being taken.
There may also be other reasons that Delotte failed to report these red flag situations. One possible reason is because the members of the team that would have discovered them could have been scared for their lives. It might sound a little out there to think that accountants would have their lives threatened but it’s not. People will do crazy things when there is that kind of money on the line. Also the fact that it is taking place in a war torn country that is full of terrorists makes it start to seem believable. The main reason I believe this could be the real reason for these people to stay quiet about what they find is because it would not be the first time it has happened. In 2008 when Bearing Point was still on the job one of its advisers to the Central Bank had his life threatened more than once to try to keep him quiet.
Most people think that accounting is a boring job that is all about pushing papers and most of the time it is. There are those occasions though that can get an accountant in a lot of trouble such as this one. When an accountant has to make the choice if he/she should do what is right or wrong no matter what the circumstances are, that is when their true morality shows through. Having moral accountants that can be trusted to the right thing is very important because of the impartments of honest accounting to the world’s economy.
Rubin, Alissa J and James Risen, “U.S. Agency Ends Accounting Firm’s Afghan Contract” New York Times 17 03 2011. n. pag. Web. www.nytimes.com
No comments:
Post a Comment