Scandals, fraud and CPAs: Students speak out
We want you to "delve into the recent corporate scandals that reshaped the accounting profession in an unprecedented way. ... This will hopefully harvest a group of future accountants / CPAs that will not make the same mistakes."
That was from the e-mail I received from Seth Young, president of Salisbury's Beta Alpha Psi, talking about what they wanted in a presentation. This gives me hope about the future for this generation and us.
I had the privilege of presenting a session on fraud, corporate scandals and the impact on the accounting profession to a group of students at Salisbury University on Maryland's Eastern Shore. The session was to the school's business fraternity, Beta Alpha Psi, and the Institute of Management Accountants student chapter in the brand new Teacher Education and Technology Center on campus. This session was by the students and for the students and they picked the topic.
Fraud - Salisbury University Accounting Students View more presentations from Tom Hood.We had a great session with a lot of discussion. Here are some of the highlights:
- "I didn't realize how many people are likely to commit frauds." (Twenty to 30 percent will and 40 to 60 percent will at the right price, according to one study by the University of Missouri.)
- "Government should not be interfering in accounting standards like fair value. They don't understand accounting."
- "More government regulation is not the answer."
- "I will be more aware (of fraud) and ready to stand my ground better."
- "They should not be stopping short sales. That is how you can see potential problems in the market."
We had a great discussion about how transparency and XBRL are tools that they have (given their use of Web 2.0 and technology background). We finished with tips for them to stay ethical (the mirror test) and have the courage to "do the right thing":
- Publicity test: How would your action look on national TV or in a headline?
- Conscience test: Listen to your inside voice.
- Parent test: If you had children looking over your shoulder, would they be embarrassed?
- Role model test: Would your role model approve?
- Universality test: What if everyone did this?
- Golden Rule: Would you like to be treated this way?
These are sharp, astute students who are much more aware of the world than I remember when I was in college (assuming I can remember back that far). I came away form that session energized, hopeful and thinking how lucky our profession is to have this crop of students almost in our workforce.
Here are some of the resources I shared with the students:
- Madoff fraud: Markopolis whistleblower memo
- Sherron Watkins memo about Enron
- The MACPA's Accounting Reform Task Force report, circa 2002 during the Enron-Worldcom affairs.
- Wired magazine: "XBRL: Road Map for Financial Recovery"
- Wired magazine: "Recipe for Disaster: The Formula That Killed Wall Street"
- Transparency, Accountability, Efficiency: Time for a Revolution
Prior posts about student encounters on CPA Success:
- Salisbury: Top 5 ways to attract talent
- University of Maryland: Boomer meets a herd of millennials
I hope the students write in some comments with more of their thoughts and perspective.