L.A. Forum: Overseeing the Accountants
Proposals to increase the oversight of the accounting industry in light of the Enron and other corporate scandals are circulating in Congress and at the Securities and Exchange Commission. The plans include the creation of an independent oversight board to monitor the industry. So the Business Journal asks: Should Congress step up efforts on corporate oversight?
Martin A. Wood
President and CEO
General Management Resources
It’s a double-edged sword. As a corporate owner, I’m against more control, more people looking into my business. But as a citizen, a patriot, and an investor, I feel something has to be done. There’s a huge lack of credibility in terms of public opinion about our accounting community, but also in the boards, which are supposed to have oversight. I think an SEC oversight board is part of the answer.
Sharon Allen
Managing Partner
Deloitte & Touche LLP
The time is right to create a new body, dominated by individuals from outside the accounting profession, that would be empowered to oversee our profession, perform quality reviews of the practices of public company auditors, and discipline those auditors and their firms when appropriate. I strongly believe that the profession must work with the SEC to develop a “user-friendly” system to review and “pre-clear” accounting for complex and unusual transactions before they’ve been reported in the financial statements.
Bruce Lorman
Attorney
From a legal perspective, there is a sufficient amount of laws but they need to be enforced. I would agree with the chairman of the SEC who has called for disclosure of accounting principals that a company uses. I think that would be important for public confidence in securities markets. The government needs to assure the public that full disclosure is being made and to protect the integrity of the financial markets.
Josh Gertler
Vice President
Consensus Planning Group
Yes, Congress should step in. But in doing so, Congress should strike a balance between protecting investors without stifling free enterprise.
Neal Hoffer
Partner
Tanner, Mainstain, Hoffer & Peyrot
The answer is yes. The private sector, from the investment bankers to the CPAs and corporate executives haven’t done it themselves, it’s a failure of truth. And now we need the government to get involved. Regrettably, it’s the last straw.
Donald Gursey
Partner
Gursey, Schneider & Co. LLP
Absolutely. Based on the number of failures that have been attributed to the CPAs, I’ve found that there are a lot more culprits and lot more industries that are equally if not more culpable in this latest fiasco. We know there are analysts with special interests such as investment banking, etc. and those kinds of conflicts create market conditions that need fixing.
