This is not new, but i don't remember seeing anything about it on here, so i will post it, i think we all need to write our congressmen and senators and express the need to get this passed. The Federal Reserve needs to be audited. GovTrack: H.R. 1207: Text of Legislation, Introduced in House
IT is a nice theory, but no audit firm has the resources or independence to produce a quality audit of the fed.
I obviously do not know much about the Fed's system of internal controls, but I am sure one exists. That could likely be documented and tested for effectiveness, but that doesn't give us any faith the financials are presented in manner that is free of material misstatments. Given the volume, scope, size, and complexity it would be very hard to impossible to audit the fed's financial statements. There are exactly 4 firms in the world that could theoretically pull it off, but those same firms also audit or provide business advisory services to the investment banks and lack the independence to audit the fed. I don't even know what kind of standards the fed operates under, and there is likely nothing to audit to. It can't be audited like a public bank, or a government entity because it is neither of those. This is typical Ron Paul crap. Say some things that sound awesome but are not really doable.
so we just go on and take a private corporations word for it? What happened to that bailout money that just vanished into thin air. There has to be some way to do this. If we can land on the freakin moon, im sure we can come up with a way to audit a private company.
I don't think anyone has the technical competency or bandwidth to carry out this audit. There is really nothing to compare the FED to. I worked on the 2005 re-statement of the AIG financials. It took a steady team of well over 300 professionals 2 years to do that work. IT cost hundreds of millions of dollars, and AIG's assets are not nearly what the Fed's are. I also don't know what the baseline you would audit to would be. Before you can audit it you have to know what you are auditing to. Paul's bill does not address that. The other thing to consider is the poor track record auditors have. Enron, Worldcom, Z-best, Health South, Tyco… huge frauds not uncovered by audits.
It may be a huge undertaking, but does that mean that we don't try? If nothing else, it indicates the mindset that I would like to see from our representatives.
I think there is very little chance of getting a quality audit of the FED. I would rather not spend the hundreds of millions of dollars than spend them and uncover nothing. I do agree that it is the right mindset. I'm just not sure that is enough to warrant the cost.
