Wednesday, November 2, 2011

If you're going to make an error, might as well make it a big one

How do you lose €3.6 billion euro? You make a basic error in an accounting spreadsheet (that virtual money is tricky stuff given it's just 1s and 0s). As errors go its a whopper. It's 2.3% of Ireland's GDP or about 10% of the annual tax receipts or roughly equivalent to the amount that was cut out of the budget last year as part of the austerity measures. Basically, it's a massive amount of money. To put it in context, if you paid back a euro a second, it would take 11 days to pay back a million euro; it would take 114 years to pay back 3.6 billion. As the Irish Times reports, this accountancy error has just been discovered and reported by the Dept of Finance. Thankfully we've found the money, lowering the debt, rather than discovering we owe the money, but still. Given the financial mess the country is in, you'd think 101 accounting would be top of the agenda.

No comments: