1. Does accounting cause bankruptcy?
2. Should the federal government have bailed out AIG, especially when it had not rescued Lehman Brothers and had let Merrill Lynch be taken over by Bank of America?
American International Group, Inc. (AIG) was the world’s largest insurance company with major offices in New York, London, Paris, and Hong Kong. From 2005 to 2008, the company had a series of accounting problems. First, it was convicted of fraudulent financial reporting, and, then, of reporting mammoth unrealized losses that led to the company being taken over by the government. Throughout this period, it went through four CEOs.\