After the fallout from the Enron scandal and the questionable auditing practices performed by Arthur Andersen, collegiate accounting departments like ASU are left with questions of what should be done to prevent similar situations.
Andersen, an independent auditing firm headquartered across the world, was the auditor hired to examine and review Enron's financial information.
Changes must be made at the most fundamental levels of accounting courses, according to Marianne Jennings, professor of legal and ethical issues in the ASU master of business program.
"Many accounting classes today are not teaching 'Why good auditors go bad,'" Jennings said. "We do a good job of informing students about failures, but never go into in-depth explanations."
The Houston-based Enron Corp. filed for Chapter 11 bankruptcy after a proposed take-over by Dynegy Inc. was retracted. Enron was well known for its specialization in energy services along with wholesale, broadband and transportation services.
Jennings also said only accountants themselves could prevent incidents like the situation Enron is presently going through, from happening by disclosing information to investors and the general public.
Accounting junior Aaron Leonard agrees with Jennings' view that accounting schools must take a more active role in teaching students about ethics.
Leonard added that the ASU School of Accountancy prepares students by providing examples of auditor violations and definitions about ethics, but does not further that training as the semester progresses.
Currently, the College of Business requires students to take a one-semester course on legal and ethical issues.
The problems that plagued Enron and Andersen are symptomatic of many companies hiring independent auditing firms to review their financial statements for accuracy, but then meld into consultants as well, Jennings said.
"They have to stop that," she said. "You cannot play both ways, and to think that there is a possibility that an auditing firm can do that, it's crazy."
Reach the reporter at tony.ku@asu.edu.
