Integrity and ethics must become a part of every course in every curriculum.
by Rick Telberg
At Large
Accounting academia is shouldering some of the responsibility for the audit scandals of a few years ago and in 2005 will be doing more to safeguard against future financial reporting fraud, according to our ongoing study of practicing CPAs, educators and other accounting professionals.
"As academics, we have to continue asking ourselves how we contributed to the attitudes that caused the profession's problems," said Gary L. Sundem, an accounting professor at the University of Washington in Seattle. "What caused a few of our accounting graduates to become villains -- the perpetrators of the scandals -- while others were heroes -- those who identified wrongdoing and brought them to light?"
Professor Sundem's remarks are part of broad survey opinion among visionaries and leaders in the profession as part of our 2005 Outlook Study. We began reporting January 3rd on the results of the study with the views of AICPA Chair Bob Bunting, in "Bunting Sets Agenda for New Year."
"I don't think it was because most accounting programs ignored ethics; it was more because we were not effective in conveying its importance," Sundem said.
How will academic leaders respond to the key trends in 2005? "I don't think more ethics classes are the answer, though they may be helpful," Sundem replied,. "Rather, we need to make integrity an important part of everything in our accounting programs, from faculty role models to discussing the ethical implications that underlie most of what accountants do."
Dana R. Hermanson, accounting professor at Kennesaw State University in Kennesaw, Ga., said that in his classroom he is stressing ethics, fraud prevention, corporate governance and the pressures that auditors and accountants face on the job.
"It is critical that students understand the role of auditors in the economy and that they do not lose sight of this role once they are in practice," Hermanson said. He also has increased his personal research focus on issues related to fraud, internal reporting controls and corporate governance. "I want to learn more about what works and what doesn't work and carry the message of sound governance and control to the practice community," Hermanson explained.
Because of an increased interest in corporate fraud brought on by the Sarbanes-Oxley Act, University of Mississippi's Dale A. Flesher said that he and his fellow business educators are being encouraged to implement new courses in fraud and to incorporate more fraud and ethics training in existing courses. They are also encouraging younger students to major in accounting.
Steve Albrecht, the associate dean of Marriott School of Business at Brigham Young University, noted that because of the scandals and the Sarbanes-Oxley Act, accounting firms' audit-related services work has been increasing rapidly. In response, he is encouraging his students to become "more proactive in the profession."
The professors seem enthusiastic about the accounting profession's business prospects in 2005, but are wary of the potential for more auditing scandals.
"As long as we don't have another big accounting fraud in the U.S., I see 2005 as a very good year," Hermanson said. "The profession can further rebuild its credibility, and investors and others hopefully will appreciate the new internal control audits" required by Sarbanes-Oxley.
Sundem added, "We can't afford major setbacks. Unfortunately, audits are not perfect and never will be, so there is always the chance of what some may call audit failures."
