alephnull on 03 July 2008
There's no conspiracy theory here. This is a well documented consequence of the "priciple-agent" problem fairly solidly backed up -- by the standard of economics, an admitedly poor standard -- by empircal evidence. This is one of the arguments some economists make against quarterly and even yearly reports. Most people, I think, do not realize how much flexibility there is in accounting. Small changes in how you depreciate various assets and value various illiquid, exotic forms of "capital" can wildly affect your margins, just ask Bear Sterns. There is in fact no definitive right way to do it that everyone agrees on.
