Arrays Of Accounting Errors

Ooops!!! Bloomberg (03.30.05):

"American International Group Inc., the world's largest insurer, said an array of accounting errors over 14 years may have inflated its net worth by as much as 2 percent, or $1.7 billion. 'The depth and breadth of troubles and apparent lack of accounting controls at AIG is alarming,' said Morgan Stanley analyst William Wilt....'" Bloomberg.com: Top Worldwide

"AIG also said it inappropriately used offshore reinsurance companies to take advantage of accounting benefits. Reinsurance deals with Barbados-based Union Excess Reinsurance Co. inflated net worth by $1.1 billion since 1991, the company said in the statement." "Other problematic transactions masked $200 million of insurance underwriting losses and inflated at least $300 million of investment income, such as interest and dividends, AIG said." "Several transactions 'appear to have been structured for the sole or primary purpose of accomplishing a desired accounting effect,' AIG said. Correcting the mistakes will result in a reduction of the company's shareholders' equity, which was earlier reported as $82.9 billion." So when does an array of errors become a purposeful and concerted effort?