Accounting at a Crossroad

By Eugene H. Flegm

DECEMBER 2005 - The accounting profession, broadly defined to include both private and public CPAs, has been going through a terrible time. At the start of this century, top-management frauds at major corporations, including Enron, WorldCom, Parmalat, Tyco, HealthSouth, Qwest, and Global Crossing, resulted in the loss of pensions and jobs for thousands of employees; the dissolution of a major public accounting firm; the discovery of widespread manipulation of mutual fund accounts for personal gain or privileged customers; and the fining (by New York State Attorney General Eliot Spitzer) of 10 major investment banks $1.4 billion for their part in hyping high-tech stocks during the infamous stock market bubble of the late 1990s, the collapse of which resulted in the loss of billions.