Here's a thought for all the lawmakers and stakeholders and accountants worried about the effect of moving away from rules-based and towards a more standards-based interpretation of generally accepted accounting principles.

Instead of fighting about which methods will protect accountants, the public, or corporations, adopt the standards and set up a hotline staffed by accounting professors and other experts to handle any thorny questions.

Sound daft? Well it’s already working in the field of journalism. Last January, Loyola University Chicago’s Center for Ethics and Social Justice and the Chicago Headline Club Chapter of the Society of Professional Journalists formed an unlikely partnership to form the Ethics AdviceLine for Journalists.

The SPJ’s code of ethics could work equally as well for accountants:

  • Seek truth and report it
  • Minimize harm
  • Act independently
  • Be accountable

AdviceLine calls are taken by volunteers at the university who teach ethics or have backgrounds in dealing with ethics on a professional level. I’m sure dozens of accounting professors and audit partners would be more than qualified to handle any requests on interpreting the nuances of a company’s financials and give less experienced accountants some guidance on how to proceed.Baruch College professor emeritus Abe Briloff once said he felt FASB should stop issuing interpretations because all the answers to interpreting GAAP should have been learned by accountants well before they took their CPA exam. All the official guidance, he argued, was just a ruse to excuse CPAs from doing what they know is right and save their hides from possible litigation.
Whether or not his interpretation is correct, it sure couldn’t hurt to set up an accounting ethics hotline – especially in light of all the ethical issues facing the industry over the past year.

If nothing else, setting up such a hotline would send a signal to the world that accountants are humbled by the course of events since Enron and Andersen, and truly want to do the right thing.

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