Thursday, January 14, 2010
Paging Basil Hart
The State of Alaska sued Mercer over an actuarial error and Mercer's concealing it, Gretchen Morgenson at the NYT, 20 December 2009: http://www.nytimes.com/2009/12/20/business/20gret.html. "'Following standard Mercer policies designed to prevent clients from discovering Mercer's errors,' Alaska's lawyers contend, 'Mercer's actuaries carefully avoided creating a written record of their discussions and calculations, in order, one of them testified, to avoid creating a "trace"," my emphasis. Interesting. Did Deloitte & Touche (D&T), Mercer's CPAs know this, i.e., Mercer's records are incomplete and Mercer's policy was to have incomplete records? Did Mercer violate the Foreign Corrupt Practices Act? Should Mercer's incompete records be admitted against it in all future litigation, i.e., no Mercer record should be subject to the "books and records exception: FRE 803. Does this reflect on Mercer's management's integrity, well, D&T? As Basil Hart wrote, "pure documentary history seems to me akin to mythology", my 7 February 2008 post:
Explain this to some PCAOB idiot, that's right, idiot. "You mean CPA workpapers can mean nothing"? Yes boys and girls. Hart continues, "Many are the gaps to be found in official archives, token of documents destroyed later to conceal what might impair a commander's reputation". Can you not trust a set of CPAs workpapers, even the Big 87654's, are complete? Yes. That you may not presume PCAOB inspection files are complete? You betcha.