I was taken aback to learn that Bank of America has admitted to a $4 billion mistake in its accounting over the past several years.
Bank of America disclosed on Monday that it had made a significant error in the way it calculates a crucial measure of its financial health, suffering another blow to its effort to shake its troubled history.
The mistake, which had gone undetected for several years, led the bank to report recently that it had $4 billion more capital than it actually had. After Bank of America reported its error to the Federal Reserve, the regulator required the bank to suspend a share buyback and a planned increase in its quarterly dividend.
While regulators still believe Bank of America has sufficient capital, the disclosure of the accounting error will most likely add fuel to the debate over whether the nation’s largest banks are too big and complicated to manage.
There’s more at the link.
So, let me get this straight:
- BoA employs how many bookkeepers?
- And how many accountants?
- And how many internal auditors?
- And its Board of Directors has a special ‘audit committee’?
- And it hires one of the world’s leading accounting firms to audit its books?
And with all that, they made this mistake years ago, and kept on making it?
I don’t believe it. Sorry, but that stretches credulity too far. I think this was a deliberate misstatement of the bank’s accounts, and they finally got caught at it – or realized they couldn’t hide it any longer. Banksters indeed!
(YMMV, of course.)