The SEC has announced a major investigation into McDonald's corporation today for what may become the largest accounting fraud ever. And in yet another blow to the accounting industry, Arthur Andersen's auditing department is at the center of the controversy.
In an apparant attempt to goose up earnings, McDonald's sought to introduce a new "metric" quarter pounder which in fact weighs only 80 grams or slightly less than 3 ounces. Arthur Andersen's auditors had no problem approving the new lighter burger. "We think our decision was a sound one. In fact, we were very conservative in our estimates since the hamburger is typically served with other items including a bun, condiments and a cardboard container. These typically weigh in at well more than an ounce and a half. Besides the burgers don't taste all that different from the containers anyways." The new hamburger has been tested in Canada and Japan and successfully promoted as "Quarter Pounder Light, now with 25% less fat". Andersen's audit team went along with management and stated that the new metric burger would definitely cause McDonalds to pass GAAS (General Accepted Accounting Standards). However the senior partner of the audit team noted that with the additional fiber of the container there could be increased risk of BURP (Basic Unit Recognition Practice) and FART (Foreign Audit Requirement Testing).
Shakin' All Over
However, hamburger weight is only one of several areas of potential fraud being investigated by the government. According to SEC Chairman Harvey Pittbull, McDonald's has been inconsistent in recognizing the density of its shakes. "We can find no basis for McDonald's claim to have 'triple thick' shakes," Pittbull said. "I believe they are double or even triple counting the thickness of shakes in order to 'supersize' their earnings outlook. These shakes aren't even made with ice cream. They're mostly seaweed for cryin' out loud."
McDonald's claim of "Billions and billions served" has also caught the attention of the SEC. Government investigators recently discovered dozens of McDonald's warehouses throughout southern Illinois with hundreds of millions pounds of excess inventory of Big Macs, Quarter Pounders and McDLTs. McDonald's CEO Jack Greenburger acknowledged that the number of hamburgers served had been grossly inflated in the past and vowed to correct the problem. "Customer confidence is very important to us at McDonald's," Greenburger stated. "In fact, since I joined, it's always been a bit of a confidence game here at headquarters. Therefore we are announcing a new 'Instant Give-Away' contest to right the wrongs that may or may not have been committed, not that we admit to anything," Greenburger said. McDonald's new contest will involve giving away more than 500 million hamburgers over the next 66 days. "In fact, our first winner is Mr. Harvey Pittbull our friend over at the SEC. We dumped a truck full of Big Macs from our Schaumburg warehouse in Harvey's office this morning," Greenburger said.
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