The United States would not pass Sarbanes-Oxley review

The Sarbanes-Oxley Act was enacted as a reaction to the accounting scandals of Enron,Worldcom and others of our last go-go era. The law details specific corporate governance and financial disclosures/controls associated with public accounting.

Unfortunately, the very institutions that enacted the law, Congress and the President, don't live by their own guidlines. It's the 'Do as I say, not as I do' principle in effect.

This is in essence what chief accountant of the United States, the Comptroller General, is saying. From the Statement on U.S. Government's FY 2005 Consolidated Financial Report (pdf):

GAO Again Disclaims An Opinion on U.S. Government's Financial Statements

WASHINGTON (December 15, 2005) - For the ninth straight year, the U.S. Government Accountability Office (GAO) is unable to provide an opinion as to whether the consolidated financial statements of the U.S. government are resented fairly, in all material respects, in conformity with generally accepted accounting principles.

Comptroller General of the United States David M. Walker, who heads GAO, said material deficiencies in financial reporting and other matters in Fiscal Year 2005, most notably at the Department of Defense, "have resulted in conditions that prevent us from being able to render an opinion to the Congress and the American people."

The FY 2005 Financial Report of the United States Government, which includes the consolidated financial statements and GAO's audit report, is being released today by the Treasury Department. A copy is available at [http://.../fy2005financialreport.html]
In the GAO's audit report, Walker emphasized his concerns about the nation's current financial condition and growing long-term fiscal imbalance.

It get's worse. Here's what the Secretary of the Treasury, John Snow, says about the report. From Message from the Secretary of the Treasury and Management's Discussion and Analysis:

Page 3, Management's Discussion And Analysis:

The Financial Report, required by 31 U.S.C. § 331(e)(1), is to be submitted to Congress by March 31 and is subject to audit by the Government Accountability Office (GAO). The Office of Management and Budget (OMB) accelerated its issue date to December 15 beginning with fiscal year 2004. Material deficiencies in financial reporting (which also represent material weaknesses in internal control) and other limitations on the scope of its work resulted in conditions that continued to prevent GAO from forming and expressing an opinion on the U.S. Government’s consolidated financial statements for the fiscal years ended September 30, 2005 and 2004. See GAO’s disclaimer of opinion on pages 135-154 for a full explanation of this and other material weaknesses that relate to this report.

Page 4, Limitations of the Financial Statements

It must be noted that the audit opinions of several significant agencies are disclaimed. This means that the data could not be satisfactorily audited and may be incorrect, perhaps materially so. This report includes the balances provided by all agencies including those with disclaimed opinions. However, 18 of the 24 major Chief Financial Officers Act (CFO) agencies that are consolidated in this report received unqualified audit opinions.

And Page 140 of the Complete FY 2005 Financial Report:

Because of the federal government’s inability to demonstrate the reliability of significant portions of the U.S. government’s accompanying consolidated financial statements for fiscal years 2005 and 2004, principally resulting from the material deficiencies, and other limitations on the scope of our work, described in this report, we are unable to, and we do not, express an opinion on such financial statements.

As a result of the material deficiencies in the federal government’s systems, recordkeeping, documentation, and financial reporting and scope limitations, readers are cautioned that amounts reported in the consolidated financial statements and related notes may not be reliable. These material deficiencies and scope limitations also affect the reliability of certain information contained in the accompanying Management’s Discussion and Analysis and other financial management information—including information used to manage the government day to day and budget information reported by federal agencies—that is taken from the same data sources as the consolidated financial statements.

Translation: "You simply can not count on the numbers presented in the report because we don't know WTF is going on in some of these agencies".

A public company with a similar statment from the auditors would probably be delisted from the stock exchange sooner than you can say 'no confidence'.