ANTHONY H. CATANACH JR. is an associate professor in the School of Business at Villanova University, as well as the Cary M. Maguire Fellow at the American College Center for Ethics in Financial Services. His professional experience includes five years as an audit manager with KPMG and six years in the financial services industry. Dr. Catanach has received numerous awards for his publication, teaching, and curriculum innovation efforts. He has authored numerous articles on a variety of accounting, finance, and management issues, as well as several business education texts..
If principles-based accounting is superior to rules-based accounting, as professed by so many in the profession, then this proposition ought to apply to other areas as well, including accounting ethics. The profession could set up accounting ethics as a principles-based system or as a rules-based codification, and which direction the profession chooses will speak volumes [...]
Dec 122011
In previous essays we have discussed the context in which Enron found itself during the 1990s, an environment friendly to managers who chose aggressive accounting maneuvers; we have described the crimes themselves; we have looked at the gargantuan transformation of the auditing profession; and we have examined what Arthur Andersen did not do in its [...]
Arthur Andersen was not a hapless bystander when Enron’s managers committed their accounting frauds, nor was it a duped auditor, nor an innocent victim of the media. Perhaps it was a scapegoat as all the large firms have engaged in audits of less than stellar quality, but that does not excuse its poor performance at [...]
Nov 142011
We already have discussed the context for Enron’s crimes by describing the Roaring Nineties as a period of accounting exaggeration and worse. We then referenced the first SEC filing that confessed some of the crimes by Enron’s managers. In this and the next essay, we turn our attention to the auditor Arthur Andersen; specifically, we [...]
Nov 072011
Many of us if asked to recall the details of a past crime or injustice would be hard pressed to do so. Similarly, today’s young accountants all have heard about Enron as example of financial reporting failure. However, as the years pass, the details of this accounting crime also have faded. The tenth anniversary is [...]
J. EDWARD KETZ is an associate professor of accounting in the Smeal College of Business at Pennsylvania State University. He has a bachelor’s degree in political science, a master’s degree in accountancy, and a Ph.D., all from Virginia Tech. Professor Ketz has been a member of the Penn State faculty since 1981. He also has taught at the University of Connecticut and the University of Maryland. Professor Ketz has authored and edited 17 books including Hidden Financial Risk (Wiley, 2003) which examines the corporate culture and the institutional setting that engendered recent accounting scandals. Dr. Ketz has been cited in the popular and business press, including The Wall Street Journal, The New York Times, The Washington Post, Business Week, and USA Today. He also has appeared as an accounting commentator on CNN, National Public Radio, and Bloomberg Radio.