Sunday, May 6, 2012

Reasons to be Skeptical: CREATIVE ACCOUNTING

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The Australian Skeptics financial statement for the year 1 April 1995 to 31 March 1996 as presented to the committee shows $1,276,356 being received by Australian Skeptics Inc from the Whalley bequest. A trust, called the Australian Skeptics Science and Education Foundation, was established under the chairmanship of Harry Edwards to look after the Whalley money. The statement shows that on behalf of the Foundation, the committee paid $35,000 in grants to [State] branches, and made loans of $9000 and $8000 to Ian Plimer (for his court case) and Harry Edwards (for the publication of a book). According to this financial statement $1,163,000 was then passed on to the new Foundation, leaving $61,356 presumably simply absorbed into the Skeptics budget. Total income for that year is shown as $1,380,890 and total expenditure $1,278,908, a profit of $101,982.

In July 1997 Richard Lead was appointed Treasurer of the Australian Skeptics. The Australian Skeptics Inc minutes of 15 September 1997 reports:
The treasurer's report was adopted after a lesson in "creative accounting" in which profits were miraculously turned into a substantial loss.
In the light of this statement it is perhaps not surprising that when the annual financial report of the organisation for 1995/96 was finally submitted to the Department of Fair Trading under Richard Lead's signature in July 1999 (three years late), the income had "miraculously" become $50,505 and the expenditure $50,440, a profit of merely $65, and a far cry from the profit of $101,982 revealed in the financial statement presented to the committee at the time.

How "creative" can you get?

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