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Is GM a "Going Concern"? Wait and See

In reporting a near-record 2008 loss, the automaker says auditor Deloitte is expected to raise the question in its opinion. CFO Young discusses its operating, negotiating issues.

Stephen Taub, CFO.com | US
February 26, 2009

GM 2008 audit opinion

My feeling is that D & T will be strong armed not to provide a going concern opinion on GM 's 2008 financials.GM probably met all the FASB requirements to receive a GC opinion on its "12/31/2007" stmts. Just look at the facts/ subsequent events. Did' nt GM managmt & D & T know that GM was big trouble in Feb 2008 ( date of 2007 audit report. GM itself said that if it didn't rec gov't help y 12/31/08 it would fold. They must have known this in Feb 2008 as well??? Weren't forward looking f/ stmt projections done well before 12/31/08? Seems to me that D& T to be true to FASB and professional auditing standards has no choice for the "2008" F/smts but to issue a GC opinion- if they don't, the FASB people should ques this in depth & then allow other auditors in the US to follow D & T/ GM logic is assessing other similarly situated companies worthiness of receiving a GC opinion

Posted by Stephen Serwatka | March 02, 2009 09:26 pm

GM 2008 audit opinion

My feeling is that D & T will be strong armed not to provide a going concern opinion on GM 's 2008 financials.GM probably met all the FASB requirements to receive a GC opinion on its "12/31/2007" stmts. Just look at the facts/ subsequent events. Did' nt GM managmt & D & T know that GM was big trouble in Feb 2008 ( date of 2007 audit report. GM itself said that if it didn't rec gov't help y 12/31/08 it would fold. They must have known this in Feb 2008 as well??? Weren't forward looking f/ stmt projections done well before 12/31/08? Seems to me that D& T to be true to FASB and professional auditing standards has no choice for the "2008" F/smts but to issue a GC opinion- if they don't, the FASB people should ques this in depth & then allow other auditors in the US to follow D & T/ GM logic is assessing other similarly situated companies worthiness of receiving a GC opinion

Posted by Stephen Serwatka | March 02, 2009 09:21 pm

Going Concern Issues

Just a couple of points to make... 1. It's fairly easy to see whether GM is a going concern by reading any press coverage out there now, reviewing their credit rating, or listening to their congressional testimony. I don't think D&T's analysis will provide any special insight. 2. In my own experience, external auditors don't really have a good sense of going concern issues. In fact, they don't have a very good sense of business issues at their clients in general. They are too concerned with the ins and outs, the debits and credits, the classification of accounting items, the arcane accounting theories, to really see and determine the viability of business strategies, competitive forces, etc.

Posted by Kevin Morgan | March 02, 2009 06:59 pm

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