Two national leaders in the legal and accounting professions said Feb. 24 that future business scandals, such as those at Enron and WorldCom, can be avoided by returning to the bedrock values of honesty and integrity. Details…
Alfred P. Carlton, president of the American Bar Association (ABA), and William Ezzell, president of the American Institute of Certified Professional Accountants (AICPA), took part in a panel discussion Monday evening about ethical and moral responsibilities in business. Sponsored by Elon’s Love School of Business and titled “Professional Responsibility in Changing Times: The Views from the Accounting and Legal Professions,” the program also featured Linda Poulson, assistant professor of accounting, and Robert Reed, vice president, secretary and associate general counsel for Jefferson Pilot Corp. David Noer, the Frank S. Holt Jr. Professor of Business Leadership, served as moderator.
Ezzell, a Burlington native who assumed the AICPA presidency in October 2002, said the recent business scandals have shaken not only his organization, but the confidence of investors worldwide. “The events of the last year have demonstrated to the public the critical role accounting plays. It also demonstrates that we have failed to live up to our responsibilities,” said Ezzell. He says he will encourage everyone in the accounting profession to talk about ethics, responsibility and the hard choices that sometimes face accountants when examining a client’s books.
“As a profession, we do have a greater responsibility,” Ezzell said. “We invite that upon ourselves and we accept that. It sounds sort of perverse, but one of the good things to come out of these scandals is that we recognize we’ve had some failures in our profession, and now it’s time for us to become reacquainted with the ethics of our profession.”
Carlton, who became ABA president in August 2002, said attorneys must not be swayed by the fact that clients are paying for their services. “Our clients pay us a lot of money and give us a lot of kudos, but we can’t be afraid to tell them something they don’t want to hear.” Carlton said sound legal advice, combined with honest and ethical advice from accountants, can help individuals and companies steer clear of possible misconduct.
Ezzell said accountants must step up their efforts to look for fraud, even going as far as anticipating situations where fraud might occur in an effort to avoid it in the future. “Most (accountants) never see fraud, and we don’t expect to see it,” said Ezzell. “We’re going to spend more time looking for fraud, even if there’s no reason to believe there is fraud.”
He said most cases of financial misconduct are rooted in a sincere desire on the part of employees to do something good for their company. “It’s rarely about personal gain and personal greed,” Ezzell said. “Things get tough and somebody makes a tough decision that’s close to the edge. Then the next quarter, they make another, even tougher decision, and it’s over the edge.”
Both men lauded programs such as those in the Love School that stress ethics as an important part of their curriculum. Ezzell said business schools must emphasize personal responsibility in an age where he believes more and more people refuse to accept responsibility for their actions.
“We have trended towards a society that wants to blame somebody for every injustice, every bad thing that happens. I don’t know how you get there, and there are some people who seem unwilling to make the trip.”
The discussion was the fifth program hosted this academic year by the Love School to examine business ethics and responsible leadership. Other programs included “Ethics in Today’s World,” a seminar hosted by the Elon Enterprise Academy in September, and “The Summer of Our Discontent,” an MBA Theme Week seminar in November.