The Obama administration bragged this week that 6 million people have signed up for Obamacare. This was reported on their Twitter account as reported by The Gateway Pundit and other news sources.

The most deplorable aspect of this message is that the information to support such a claim is not being provided nor is there any statement that the information is accurate and has been audited by external auditors.

If a public company were to make such a claim and it were proven false the company could and would be sued for reporting false information, the leaders of the company could be fined and jailed and the company’s stock price would tumble and its existence as a going concern would be in peril. Public companies are held to such stringent standards that they must hire outside (external) audit firms to review their financials as presented by the company and these auditors opine on the quality and accuracy of the company’s financials.

US companies’ financials must comply with US GAAP (generally accepted accounting principles) and foreign companies must comply with foreign standards which are for the most part IFRS (international financial reporting standards).

A public company would never make such a claim in a press release if it was not correct and verified by its external auditors. Part of this verification process would be to obtain support for the statement, determine the validity of the support and ensure the support agrees with the statement being made to the public.

If an external audit finds that the assertion made by the company is not accurate this would be noted in the opinion of the financial statements made to the public by the auditor and the auditor would incur fines and massive reputational risk if the results of their audits prove to be incorrect. This is what in part led to the demise of Arthur Andersen the external auditor of Enron in the early 2000’s.

So the question for the Obama Administration is not only what support do they have to make the statement that 6 million have signed up for Obamacare, but also what external auditor has reviewed these numbers and agreed with this statement?

If the administration cannot supply this information and if they were a public company, they would be fined and the leaders would be thrown in jail.

 

 

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