Way back in October of 2001, Enron's precipitous slide into ignominy threatened to also lay waste to its outside auditor, accounting giant Arthur Andersen.
But the Big Five firm quickly admitted to shredding documents related to the company’s audit, just as the government was about to knock on the door to serve it a subpoena, and promised full cooperation with all investigators.
At the time, I was asked if Andersen would eventually declare bankruptcy or dissolve. "No," I said with great conviction. "The Big Five accounting firms have weathered many other storms before and will weather this one, too."
In the past, time and time again, accountants and corporations have been given slaps on the wrist for generally unacceptable accounting principles -- without even being forced to admit or denying wrongdoing. I had no reason to believe this case would turn that tide.
What a difference a few months makes. During this time, corporate America itself seemed to be coming apart at the seams. WorldCom, Xerox, Adelphia – all formerly respected entities that now find themselves – and their auditors -- mired in enormous accounting-related scandals.
The cynical among us might say that the accounting irregularities being uncovered today are not really all that different from ones in years past – but in a bear market, investors – and regulators – are in a much less forgiving mood.
And so it looks like some sort of new regulatory oversight will soon be in place to guard against the most egregious cases in the future. Which is as it should be.
But I have to tell you that these days I cringe each time a news alert from Yahoo pops up on my computer – fearful that it might reveal the next corporate accounting scandal. Yup, I am suffering from scandal fatigue.
My days used to be filled with ruminating on whether the IRS’ e-filing program would reach its target numbers, on how accounting firms were dealing with the staffing shortage, on whether trade shows were becoming extinct, on internal battles over the proposed global designation.
I miss those days, and want them back. So if there are any other accounting-related doozies out there in corporate America, I’m praying that they come clean before the summer’s over. C’mon fellas, the IRS needs some press.
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