Monday, August 05, 2002

I am hesitiant to say anything about my employer in a public forum. I don't want to be a leak, an apologist or a nay-bob. But I did find this article on Slate (AOL, A-OK - What did AOL's accountants do wrong? Not much) quite interesting and -- in my personal opinion, not based on any knowledge gained from my position within the company -- accurate. Here is an excerpt:

So what did the Post uncover to justify all the uproar? Very little, it turns out. The best indication of that is in the Post's headline: "Unconventional Transactions Boosted Sales." Even if that statement is literally true -- and based on the Post's reporting, it seems to be -- there's nothing wrong with "unconventional transactions" as long as you don't abuse accounting rules to make them happen. What's missing from the Post article is any evidence that AOL did.

So why are the Justice Department and SEC now investigating? Two reasons. First, this isn't the first time AOL's accounting hasn't been as transparent as it could be. In May 2000, AOL agreed to pay the SEC a $3.5 million fine after being accused of improperly accounting for the way it distributed free disks. Given AOL's history, it's possible there's something dastardly going on here, even if the Post didn't find it. But more important, when a major newspaper like the Post devotes thousands of words to exposing unflattering, if ultimately defensible, accounting practices during one of the worst waves of accounting fraud in history, the SEC and Justice Department can't not follow up.

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