The Securities and Exchange Commission

There are many questionable accounting practices that some
companies get involves in from time to time. The idea of the accounting tricks
are always to try and make the company look better to investors when they are
trying to make determinations about how a company is doing. The companies want
to look good so that they will be able to either retain money in their coffers
or gain more money from new investors. The worst part is that many of the
accounting practices are perfectly legal. Immoral, but legal.

The Securities and Exchange Commission (SEC) is looking to
change all of this. One of the things that they want to put a stop to is the
practice of selling assets to other companies in order to buy them back after
reporting the quarterly statements. This is known as ‘short-term borrowing’ and
it is completely legal to do. Worst of all, there is nothing which states that
they have to announce these borrowing methods on the quarterly reports. They
only have to state it on the annual reports.

One of the reasons why the SEC wants this practice to stop
is because it defrauds those looking to find out what is going on in the
company. If they go the true picture about companies like Lehman Brothers
Holding Inc., they would see that the company is more in the market for the
target of debt consolidation leads
than the growing company they made themselves out to be. By looking at the
holdings of the company right after the quarterly report, you would see a very
different picture � one that is closer to the truth.

Measures Being Taken

Currently the SEC is investigating 19 other companies which
appear to have engaged in the same kinds of activities as Lehmen Brothers were
involved in. They have asked them to talk about their accounting practices and
what it can mean to the investors for the companies.

While it is not likely that they will make the companies see
that it is better for them to invest in debt consolidation
rather than in defrauding the investors, it will at least help to pave the way
to new regulations. This is done by taking a realistic look at the dealings of
the companies in question and seeing if it is causing a negative impact on the
investors of the companies which have engaged in questionable accounting
practices.

The regulations which have been proposed will first have to
be agreed upon by those in the SEC and then they will have to be agreed upon by
the companies and the investors before going back in for a second vote. The
lengthy process will likely allow the companies to continue in stealing money
from investors, but it is good to see that action is being taken to allow the
companies with the ability to act with a sense of propriety to get rewarded for
their good business sense and honesty about their performance.