191–200 of 303 posts
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Yeah but then the experts at the big 4 are 23 year old grads with no experience. I don't get it.
I worked in government and they were still obviously smarter than the gov workers. Experience is not everything and I think that should actually be a major lesson from government employment practices.
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> Really? 5 years? That seems really harsh. Is it all business failures or does it have to be due to mismanagement? There’s a big difference between bankruptcy and business failure. Plenty of businesses fail without entering bankruptcy, they’re wound down responsibly and their creditors are repaid in full. If a company fails due to bankruptcy, then it means that people who lent money to that business are out of pocke…
The counterpoint is what's the point of reducing losses on bankruptcy if it makes the entire business climate worse? By trying to protect creditors you just make everyone poorer.
Ultimately most of the real creditors to small and medium businesses are other small and medium businesses. So if you offer no protection to them at all, you either get extremely risk adverse companies that refuse to offer any sort of credit (such as 30 day invoices), or a single business failure ends up causing a cascade of failures all of their suppliers take the hit, and also go out of business.
Ultimately increasing the trust between businesses, so they’re able to extend thing like 30 day invoices as standard, substantially improves the business climate. It reduces the barrier and risk of everyday business transactions, makes it easier for businesses to manage their cashflow, and ultimately allows businesses to grow faster and in more robust manner.
None of this is about protecting lenders like banks, or investors. Most of the time they screwed anyway, it’s about protecting other businesses who’s primary function isn’t financial risk management.
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Who says it makes it worse? Limited liability is a privilege not a right, as such it can be taken away from you if you can't act responsibly.
Just because the government claims something to be a mere privilege does not justify bad policy.
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Audits can be very expensive and finding the optimal depth of auditing is difficult and unlikely that a public trust would be anywhere close to optimum amount. Financially savvy people should already know that the audit process is flawed and should not simply be accepted on face value. How flawed is usually stated in the audit, checks are split into controls testing and substantive testing. Usually the cheaper the au…
Here’s a counter example: going public. The SEC does a deep probe, one that has material teeth, and “yes” isn’t a conclusion. Surely the SEC is subject to these forces? Another example is merger approval, along antitrust and other regulations. This is a very deep process, clearly with a lot of extremely powerful money on the line. Or another, tax collection. Fact is there’s actually a lot of examples of effective con…
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Yeah but then the experts at the big 4 are 23 year old grads with no experience. I don't get it.
I worked in government and they were still obviously smarter than the gov workers. Experience is not everything and I think that should actually be a major lesson from government employment practices.
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Exactly what good did Moody’s do with 2008 and SVB?
Moody, Standard & Poors and Fitch are RATING agencies. RATING agencies are different from AUDITING companies different from CONSULTANCIES. Rating agencies were somewhat restructured after 2008 (but are still kind of edgy) - because they did literally write AAA on a piece of paper for money. But there ratings were opinions and had no real legal meaning.
EY, Mckinsey, Accenture, BCG all of them should be banned. They were the big proponent of the the just in time management principles in the hospitals in the Netherlands. Then when covid came they were the first the market on twitter & linkedin for advice how to improve your health inventory & deal with covid challenges. Serious impact with zero skin in the game. These consultants are parasites. They are mainly used a…
My partner works at one of these big four companies and the way she puts it - they essentially function as outsourced expertise for governments the world over - essentially expert functions have been hollowed out of state governments and into the private sector and thus there is really no expertise within the national government level to handle complex tax and accounting situations and they are instead all outsourced…
“Corporatism” is a model of society in which government, private industry, union, and other power centers are integrated, mutually cooperating, and centrally coordinated. A “marriage of corporatism and government” is just “corporatism”.
(Corporatism is an element of, but not coextensive with, fascism.)
Look, these sentences are probably more than just and even on the light sight. Handing in your auditing license is a pretty severe punishment, at least career changing. But will the risk and audit professionals at BaFin face the same penalties?
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If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and taking the intended spirit of the site more to heart, we'd be grateful.
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Also fair, I used the wrong word there. Though, I don't think the distinction really matters within the context of my point. Both investors and creditors are exchanging money for a bet on future profit derived from the company being solvent in the future and having extra money to either pay back debts or pay out dividends. My point is that America tends to get a lot of flak for rigging the system in favor of those wi…
> Both investors and creditors are exchanging money for a bet on future profit derived from the company being solvent Nope, that's still just investors. Creditors are not people who made bets on the company's future profits. Creditors are people who the company made legally binding contracts with to pay them. For example people who provided products and services who are getting stiffed. Also: taxes due. Even a bank l…
That being said, I completely disagree with this part:
> Creditors are not people who made bets on the company's future profits.
Nope, that's not how reality works. If the company doesn't have the money (including their assets), you aren't getting paid.
Extending credit is fundamentally a risk. That's one of the reasons credit card companies charge interest.