Beazer's (BZH) accounting woes make things even more interesting

Shares of Beazer Homes (NYSE: BZH) have lost almost 80% of their value so far this year. Investors have worried about the subprime meltdown and housing softness, and now you can toss those dreaded "accounting irregularities" into the stew. Last week the company told investors that its former chief account officer had improperly recorded "reserves and other accrued liabilities." The company fired him in June after he was caught trying to destroy company documents. Sweet.

The SEC had already begun investigating Beazer in May. According to The Wall Street Journal's Heard On The Street, "One possible focus of the SEC's inquiry is whether Beazer was properly disclosing its mortgage practices to investors [...] Accounting irregularities in the company's books, however, can be easier for investigators to pursue, this person said."

With the company's debt already in junk territory, I think you'd have to be nuts to even consider buying Beazer right now. The fundamentals of the business are terrible and there are serious questions about the ethics and legality of the company's practices. The company has repeatedly denied rumors that it is on the brink of bankruptcy, but if it is, the stock will likely go to zero. With its current market cap of over $400 million, that's a pretty steep fall. Oh yeah: we're still waiting for the 10-Q.

Shares of Beazer, along with shares of just about everything else, have opened substantially down this morning.