• Aug 22, 2010
Now that General Motors has submitted the necessary paperwork for its IPO to the SEC, Forbes read through the entire 734 page filing and found this curious tidbit: "We have determined that our disclosure controls and procedures and our internal control over financial reporting are currently not effective." And yes, that means exactly what you think it means.

In case you think it's only cautious puffery, the document goes on to say, "Until we have been able to test the operating effectiveness of remediated internal controls and ensure the effectiveness of our disclosure controls and procedures, any material weaknesses may materially adversely affect our ability to report accurately our financial condition and results of operations in the future in a timely and reliable manner."

And there's more, but the gist is that GM wants you to know that it might have to shuffle some of its past numbers at some future date. The problem seems to go back to early last year, when new accounting procedures were put in place to please the SEC. The General's trip to Narnia bankruptcy and back, however, prevented it from fully vetting those procedures, so it can't be 100 accurate. It could actually just be caution on GM's part, but nevertheless, some funny things are happening on the way to this IPO...

[Source: Forbes]


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  • 23 Comments
      • 4 Years Ago
      what about the bondholders? the uaw and it's corrupt leaders did not lose a penny in this bankruptcy and now the bondholders get stiffed., what else can this corrupt dictator take from the citizenry? i understand the dictator in chief is eyeballing our ira's--401 k's and other cash rich pension plans at least what is left of them and give you an annuity in exchange and obama gets the cash up front. it is called nationalization--first steps in a nation of laws becoming a marxist dictatorship run by obamas friends--maxine waters, alan grayson, harry reid and charlie rangel.. get out the pitchforks. vote in nov.
      • 4 Years Ago
      Just the same GM bs that has infected them for the past 40 years. You expect them to change? Don't hold your breadth, Farago is right and the death might take a little longer than we thought but ca mon. A $40,000 ELECTRIC car? The Cruze 2 years late. The Malibu and the Impala years away from redesign. They certainly advertise the trucks which are 5 years old except for fully boxed frames and you would have to be an auto junkie to know that. WTF. I sold Chevy for alot a years and I really believe that they should get Campbell-Ewald back and update the "Like A Rock" ads and put the truck guys at Chevy in charge of the company.

      Here is what Chevrolet used to be.


      • 4 Years Ago
      Just like the Government.
      • 4 Years Ago
      I wonder what exactly was ineffective -

      This statement is curious one, however it no doubt stems from a failed test on a particular key financial control. It does not, however mean that there was any particular accounting errors irregularities. The ineffective control could be as simple as reports not being reviewed, however it would seem that this ineffective control would be slightly larger.

      The statement is basically a warning that anyone who uses the financial information should know that there could be a *Chance* that some errors have been included in the financial statements, and thus will be fixed via a financial statement restatement.

      Further, there is very good chance that the controls will get remediated, and all of this will just go away and a happy IPO will ensure.
      • 4 Years Ago
      Dunno why anyone is surprised at this. IT'S AN IPO FILING. If you have any experience with such a thing, you KNOW that it's written in the most conservative, legally ass-covering way possible by a team of lawyers. Seriously, try reading any IPO filing and it's exactly the same.

      There's a saying about them on wall street, even: "If everyone read the S1 for an IPO, no one would ever invest in an IPO."
      • 4 Years Ago
      And this is why I like LLCs...
      • 4 Years Ago
      So should I "talk to Chuck" or not?
        • 4 Years Ago
        Better talk to Scott,


        Scottrade is way better than these overpriced, "knowledgeable", "experts" at Schwab.
      • 4 Years Ago
      Talk to chuck.
      • 4 Years Ago
      Fixable. Just hire a bunch of CPAs who KNOW what they are doing, put them in charge and have every accounting manager report to them. Everything will be fixed in no time.

      Also, have VPs order reviews of every important procedure people below them perform.

      I was surfing the web for basically 3-4 months, one day a VP calls me and says he wants to see me some time around 3:30 PM and see all my reconciliations and to explain to him how the procedures work. That was last month (July), all i had was February numbers. He was OK with it but believe me, i am up to date now.



      • 4 Years Ago
      Since when could the government, or the unions count anything accurately for themselves?

      Do you trust people who have run our country into so much debt our great grand-children will be wage-slaves..

      Or the people who spend more on politics and golf courses and paying their leadership, yet are looking to off-load their health care and pension obligations off on the taxpayers, as well...

      You expect them to account accurately in their owned car companies? What would lead you to believe they would do that?
        • 4 Years Ago
        As a whippersnapper who's more likely to be a wage-slave in a failing country, I can tell you that I'd sooner wage-salve for the government's attempts to keep industry in America and keep some semblance of labor unions than you know, wars, being the world's police, and paying for a lower tax rate on people with very high incomes.
        • 4 Years Ago
        That is a false dichotomy.

        Those two options are not mutually exclusive, nor the only two options.

        Nor do some wrong things make other wrong things better.

        Wars are a fact of life, as long as people all over the world want to oppress or conquer, or terrorize. When we wage war, we spend our treasury rebuilding also, not to mention all the foreign aid money going all over the world. All while the government that has a primary responsibility to protect our sovereign territory, and they ignore the warfare spilling over our southern border.

        Progressive taxation is not your friend, and you have no right to expect to dip into other people's pocket out of a twisted sense of false fairness. If it weren't via the government, it would be theft, and morally, taxing for redistribution (not proper government function) is not much different.

        Government is costing far more industry than it is saving, by raising costs to live and work in the US, due to over-regulation, and over taxation. If you haven't noticed, it is more expensive to produce things in the US, and most of our manufacturing industry has left our shores. Saving industry? yeah right.

        Not that industries ever sprung up in free markets, and succeeded more in the US than in any other part of the world, before being over-regulated and -taxed. Oh, wait. The US has been an economic superpower and innovator for most of a century, when allowed to work unencumbered.

        Wage slavery is not something to wish for, and not something to dismiss. If we lose freedom, we won't live to see it come back. The Government and Unions are returning us to a subservient, dependent, endebted lifestyle that they claim they saved us from long ago, where you owe your soul to the company store. The government is the new creditor to the people, while itself being a debtor to everyone else, and de-valuing the money by printing it out of thin air.

        Taking over and running US industries is a stepping stone on that path, and that is exactly what the government and unions are doing with GM and Chrysler. They should have been allowed to reform and re-organize through the standard non-liquidation bankruptcy process, and emerged healthier on their own merits, not the taxpayer's future liability and current debt.
      • 4 Years Ago
      Don't care. My next vehicle will still be a GM vehicle. What they are coming out with, is what I want and I am going after it.
      • 4 Years Ago
      Crazy.
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