Freddie Mac, the embattled US mortgage provider, reports that accounting irregularities will mean a revision of earnings by as much as $4.5 billion. But where accounting discrepancies are usually associated with bloated profits, earnings at Freddie Mac will be revised upwards.
Gregory Parseghian, CEO and president of Freddie Mac, says: “The information we are disclosing today reflects poorly on Freddie Mac’s past accounting, control and disclosure practices. Management is aggressively addressing these issues.” It may reflect poorly on management, but at least the shareholders are cheering – the fair value of shareholder equity is set to increase in line with the revisions.
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