blame it on accountants for poor investments

However much we want to blame the accountants for what they do and how they do it, there is one thing we cannot do, that is, take their advice for investing decisions. 

A firm would do well if it takes good projects over a long period of time which earn returns higher than its cost of capital. Easier said, but in practice we don't find too many firms enjoying excess returns over a sustainable period. Value creation is a rare virtue.

Value destruction is easy; take bad projects on a periodic basis, and then blame someone else; how about bad weather? Nevertheless, the last thing the managers could do is blame accounting advice for their poor investing decisions. Is it their ignorance or ego issue, or just for the heck of it? 

The recent news is about MF Global going bankrupt due to its poor judgment on sale of certain sovereign (mostly bad European) debt instruments, only to repurchase them back (repurchase agreements). The result was higher liquidity, and yes, a lot of commitments; we call it debt, but for which the accountants might have another name and treatment; the definition of debt to the accountants is probably different; it appears that they cannot recognize contractual commitments having debt characteristics. 

MF Global was formed in 2007 just before the financial crisis in 2008, and was trapped in a series of bad investments; it was forced to bankruptcy in 2011. 

Now it is blaming PwC for its poor judgments. Kidding it or playing the scapegoat?

If the managers try to play the short term games and dress-up quarterly results just to satisfy the rating agencies, analysts and investors, it is only a matter of time for the reality to catch up.