Apology for Accounting Failures May Have Been Premature

“I am sorry,” Daniel H. Mudd, interim chief executive of mortgage giant Fannie Mae to ld the Senate Banking Committee last week. Mudd’s comments were made as Fannie Mae and Freddie Mac regulator, the Office of Federal Housing Enterprise Oversight (OFHEO) and other agencies prepared to testify that a new independent regulatory agency needed broad powers to limit the companies’ holdings.

The Securities and Exchange Commission (SEC), OFHEO and the Department of Justice are investigating accounting problems including altering the books with phony signatures to trigger bonuses for top executives at Fannie Mae. On Tuesday, Armando Falcon of the OFHEO, told the Associated Press in an interview that the accounting scandal could spill into the housing industry and make it difficult for homebuyers to obtain mortgages.

If the OFHEO and other agencies hadn’t acted, Falcone said “I think they would have eventually manifested themselves in the form of some larger problem that might have created some kind of systemic disruptions,” in the housing market.

Already a member? log in here.

Editor's Choice

Upcoming CPE Webinars

Dec 3The materials discuss the concepts and principles in the AICPA’s new special purpose framework.
Dec 8Kristen Rampe will cover how to diffuse the tension in challenging situations in this one-hour webinar.
Dec 9A key component to improving your firm’s workflow efficiency while enhancing your profitability at the same time is how you leverage emerging technologies.
Dec 16Kristen Rampe will give tips on how to bring confidence into the room and build a valuable network.