George Conway: Accounting Firm's Move Is Worse For Trump Than Being Impeached Twice

[ificandream]

By Josephine Harvey/HuffPost

An accounting firm’s decision to cut ties with the Trump Organization spells very bad news for former President Donald Trump, according to conservative attorney George Conway.

Trump’s longtime accounting firm, Mazars USA, sent a letter on Feb. 9 to Trump Organization executive vice president and chief legal officer Alan Garten notifying him of the firm’s decision to drop the business as a client. It also said that the financial statements it prepared for Trump between 2011 and 2020 “should no longer be relied upon.”

Those statements are at the center of two investigations into whether Trump illegally inflated the values of his assets to defraud lenders. The Mazars letter was included in a court document filed Monday by New York Attorney General Letitia James’ office.

According to Conway, who is married to Trump’s former senior White House counselor Kellyanne Conway, having a decade’s worth of financial statements pulled by accountants is “just about the most calamitous thing” that could happen to any business with outside financing or investors.

Read more: https://www.yahoo.com/news/george-conway-accounting-firms-move-035756986.html

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[Deuxcents]

1. Good news 🤗

[SoCalDavidS]

2. What Good Did Being Impeached Twice Accomplish?

Sure, it's great on paper, but relatively meaningless in the scheme of things.

[LuvLoogie]

25. It further exposes the GOPs complicity.

It shows that Democrats were correct to go through it despite GOP obstruction, complicity, and denial.

[Srkdqltr]

3. Ok so..up until now the firm was ok with the grift.

Now that the j6 investigation is turning over all the rocks the accounting firm is in CYA mode.

[underpants]

5. Yeah they cashed the checks didn't they?

This is pretty bad for him though.

[leftieNanner]

6. I'm Guessing that they (foolishly) assumed

that The Orange One was providing accurate information to them. Figure they turned a blind eye if anyone thought some of the numbers were hinky. Mr. Trump would never lie to US!!

[Srkdqltr]

7. Dosen't say a lot for the company.

How much confidence can their other clients have in them now.

[leftieNanner]

10. Everything Trump Touches Dies

It may be difficult for them to get any new clients. Guessing KPMG might be sniffing around.

[Beachnutt]

4. How is Kellyanne these days ?

[OAITW r.2.0]

8. I'm sure there is a Russian accounting firm that will be happy to provide

their services to the Trump Organization.

[Fiendish Thingy]

9. No wonder Eric was crying on Fox News. Nt

[PRETZEL]

11. There's just a whole bunch of weird to this

understandably, yes it is up to the Trump Org to provide the information, but unless Mazur's were issuing anything less than audited financial statements, Mazur is also in a whole bunch of trouble. And I highly doubt that they were issuing anything less than audited financial statements. That becomes even truer if they were issuing unqualified opinions and no material findings.

And as an aside, I'd hate to be the partner in charge of this account. They're going to have a whole lot of explaining to do to their Board of Directors.

[ificandream]

12. Yeah, that explains Mazur's dropping Trump, but why did it take so long?

Surely, they must have had some kind of indication before this that Trump and the Crime Family were lying out of their ass. Why just now, though? Obviously the heat from the 1/6 investigation had something to do with it. But Mazur would have been smarter to dump them months ago, maybe even longer.

[PRETZEL]

18. That's why I think the partner in charge has a lot to answer for,

I really don't see a good reason why it took this long.

[LuckyCharms]

17. My opinion that I posted elsewhere.

1) Commercial lenders often perform their credit analysis and a loan committee will ultimately approve commercial loans based on financial statements that are "compiled" by an accountant.

2) Compilation statements are prepared by an accountant, but are unaudited. The accountant merely takes the information provided by the client, and compiles it into GAAP (Generally accepted Accounting Principles) statement format. Since the statements are merely compiled, but not audited, the accountant expresses no opinion on whether the financial statements can be relied upon.

3) Commercial lenders prefer audited statements with a CPAs opinion attached to them. However, many private companies will instead submit compiled statements to the lender, which may be accepted depending on the relationship with the lender and the entity seeking the loan.

4) Commercial lenders will factor the issue of using a compiled, rather than an audited statement, into their risk analysis when deciding whether to grant the client a loan.

5) For a CPA firm to audit and issue an opinion on a firm's financial statements, many steps must be taken. These steps include: a complete assessment of the firm's internal controls, a random sampling of transactions, etc.

6) I believe that there is no way the Trump org would allow CPAs to get close enough to their ledgers in order to allow a through audit. Therefore, Trump has probably relied on compiled financial statements to receive loans in the past. Subsequently, his loans most likely performed poorly, and he was no longer able to receive loans from traditional lenders.

7) CPAs have very little risk when compiling statements, since no audit is performed, and no opinion is expressed. However, CPAs do have some minimal responsibilities when compiling statements. For example, they must have a general understanding of the firm's business, and they should have a general understanding of the company's internal controls. Additionally, in my opinion, if the accountant noticed a huge, glaring error in what was submitted to him/her to compile, the ethical accountant would question the presumed error. If a satisfactory answer was not received from the client, I would think the accountant would have an ethical duty to refuse to compile the statements.

[PRETZEL]

19. I haven't worked in public accounting for a long time

having spent the last 25 years in government accounting but I agree with most of what you're saying. But way back when, I worked in commercial lending also and I know my bosses would never accept a compilation or review for that matter as part of the underwriting to present to a loan committee. Especially for the amounts Trump would be borrowing.

[LuckyCharms]

23. I worked for a commercial bank for a period of time as a

commercial credit analyst. I've written many hundreds of analyses of businesses requesting loans, some for high dollar amounts.

The majority of the financial statements that were supplied were compiled. And a lot of them, not only were they compiled, but they were badly compiled.

If I had a question on a statement, I would call the accountant first, who almost never knew the answer to the question. I would then call the client. For example, I would see something like "Due from business segment X, $4,500,000". I would call the client and ask what this meant, could they provide source documents, etc. They would normally refuse to answer.

I would note all accountant and client discussions in the analysis. I would calculate all of the pertinent financial ratios and include them in the report. I would outline all of the risks as I saw them, as well as anything that abated the risks.

Then the report would be presented by a higher-up to a loan committee, which included the bank president.

Just about every loan was approved. My feeling is that credit analysis was just a hoop to jump through...a risk assessment that didn't mean much, because the ultimate decision came down to the "gut feel" of the bank executives on whether the loan would perform well or not.

[PRETZEL]

24. I'm glad I'm out of that business,

that sounds scary.

[LuckyCharms]

26. Me too, me too.

In fact, I left for the reasons that we are discussing.

[Dan]

20. I'm wondering, does this expose Mazur to any financial liability?

[Lonestarblue]

27. As a privately owned company, the Trump Organization is not required to have financial audits.

The company’s accounting firm would not do those audits even if they were required. Thus, Mazers would have relied on the financial information given them by Trump. That doesn’t absolve them of the duty to observe and question anomalies, such as a property valued at $300 last year and valued at $200 million this year when property values have been increasing. I suspect that the accountants are guilty of aiding Trump’s fraud, as this article from 2020 suggests and as prior examinations of their work has shown. Read the whole article. It’s quite interesting.

https://www.propublica.org/article/meet-the-shadowy-accountants-who-do-trumps-taxes-and-help-him-seem-richer-than-he-is

“Time and again, from press interviews in the 1980s to the launch of his 2016 campaign, Trump has trotted out evermore outsized claims of his wealth, frequently brandishing papers prepared by members of his accounting team, who have sometimes been called on to appear in person when they were presented, offering a sort of mute testimony in support of the findings. The accountants’ written disclaimers — that the calculations rely on Trump’s own numbers, rendering them essentially meaningless — are rarely mentioned.

Trump’s accountants have been crucial enablers in his remarkable rise. And like their marquee client, they have a surprisingly colorful and tangled story of their own. It’s dramatically at odds with the image Trump has presented of his accountants as “one of the most highly respected” big firms, solemnly confirming his numbers after months of careful scrutiny. For starters, it’s only technically true to say Trump’s accounting work is handled by a large firm.

In fact, Trump entrusts his taxes and planning to a tiny, secretive team of CPAs who have operated at various times from humble quarters in Queens and two Long Island office parks. That team, which has had two leaders with back-to-back multidecade terms, has been working for the Trumps since Fred Trump began using the firm back in the 1950s. It was eventually subsumed into Mazars USA, the American arm of a large international firm, through a series of mergers over decades.”

[PRETZEL]

28. Very interesting article

thanks for posting.

[LetMyPeopleVote]

13. I am enjoying watching TFG being held accountable

Link to tweet

[leftyladyfrommo]

14. Getting impeached 2x didn't even phase him. nt

[ificandream]

15. I don't necessarily believe that. He has a way ...

... of not admitting his defeats. You can bet that the idea that history will slam him good pisses the shit out of him. Good. I hope we see a lot more of it. I hope HE sees a lot more while he's on this Earth that he fucked up so badly.

[Frustratedlady]

16. Why didn't the IRS catch some of this? Supposedly, they audited Trump for years...

and maybe they fined him, but from the sound of his operation, they should have jailed him. If they had, we wouldn't have had to put up with the crap of the last few years.

[Dan]

22. I'm thinking that this ties into the Congress defunding the IRS - especially, defunding or

Rather not funding their ability to audit the big corporations and the rich.

[NQAS]

21. Mazar's

Should send a press release with their letter to all the newspapers and banks in all the countries where TFG does business. Just in case they miss the press coverage here.