Estimates
Elon Musk is a big thinker, a visionary, perhaps a bit insane, but that’s why people love him. He sees the world’s potential and wants to make that potential a reality, not getting too hung up on details like sales estimates, production guidance, etc. The Wall Street Journal pointed out over the weekend, however, that “estimate” is a loose term when it comes to Tesla:
The Wall Street Journal reported Friday that Tesla has recently been building major portions of the Model 3 by hand. This comes less than a week after Tesla announced it fell short of its third-quarter production guidance of 1,500 cars by more than 80%.
Citing another example, Musk said back in July that customer deposits for 500,000 Model 3s had been received. Later on a conference call, he said it as 455,000, calling the previous number “just a guess.”
I imagine Tesla’s accounting department to either the most fun and magical place to work, sorta like Willy Wonka’s Chocolate Factory but with spreadsheets instead of candy, or the stuff of accountants’ nightmares. If you have personal experience, we’d love to hear about it.
SEC enforcement
I’m overgeneralizing here, but lawyers getting involved in the nuts and bolts of accounting seems like a bad idea:
The Securities and Exchange Commission today announced that it filed fraud charges against an attorney Marc A. Celello based on his alleged participation in a Ponzi scheme.
The SEC’s complaint, filed in federal court in Atlanta on October 5, 2017, alleges that Celello who, along with Canton, Ga.-resident James A. Torchia, was a partner in Credit Nation Capital LLC and served as general counsel for the underlying entities, helped orchestrate a Ponzi scheme involving unregistered promissory notes which falsely promised a 9% return. He allegedly prepared offering memoranda and directed sales and marketing representatives to lie to investors that the promissory notes were secure investments “backed by hard assets dollar for dollar.” The complaint further alleges that Celello knew that Credit Nation Capital was insolvent and directed an employee to fabricate a fraudulent balance sheet that made it appear to be profitable.
According to the complaint, Celello instructed this employee to create a “rough balance sheet” which leads me to suspect that other phrasing like “make it work” and “plug the numbers” might have been thrown around.
Accountants behaving badly
Norma Jean Adams (aka Norma Jean LaMantia) pleaded guilty last week to stealing over $160,000 from the School Nutrition Association of Iowa from 2010 through 2016. This was not her first rodeo, however:
In March 2003, Adams pleaded guilty in Rock Island County Circuit Court to one count of theft of more than $10,000 but less than $100,000, a Class 2 felony under Illinois law, according to circuit court electronic records.
She had been working for the public television station WQPT at that time.
Is embezzlement a scarlet letter for an accountant? That’s a tough one. You’d certainly think twice about hiring an accountant whose Google results include taking their employer’s money. Still, I can’t imagine that the School Nutrition Association of Iowa is beating off accounting talent with a stick. Pros and cons, I guess.
Previously, on Going Concern…
Megan Lewczyk wrote about the data breach at Deloitte.
Also, if you’re in Atlanta on October 18th, come hear Going Concern people yak about the gig economy. More details and RSVP here.
In other news:
- AOL Instant Messenger is shutting down.
- G.E.’s CFO is out.
- The Glut of Private Jets Means ‘Insane’ Bargains for Buyers
- An Economics Heathen Wins the Economics Nobel
- 46-year-old can of soup donated to foodbank, expired sometime around 1971
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