Dallas, TX – "Accounting: the system of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results." I'm Maxine Shapiro with KERA Marketplace Middays. That was the definition of accounting, according to the Merriam-Webster dictionary. Please note the word "verify."
I decided to go on a quest to find the code of ethics that accountants must adhere to. The nice people in Dallas at the Texas Professional Association of CPAs directed me to the Texas State Board of Public Accountancy. These are the people who back in November opened an official investigation into Arthur Andersen's audit of Enron. It will be Texas, not Illinois that will hold Anderson accountable. Anyway, I found my Code of Ethics. The Texas State Board titles them "Rules of Professional Conduct - Subchapters A through E." If I had to boil it down to one statement, "accountants must maintain high standards of competency and integrity in their practice and serve in the best interest of the public." Not the best interest of some CEO or CFO who for some reason doesn't want to reveal the truth the first time around. Just look at what happened yesterday. A large banking group restated its 2001 results. Another energy company delayed an earnings report to examine its relationship to a former unit. Tyco exposed that it had made a twenty million dollar payment to an outside director and to a charity he controls. Then, a Houston energy producer announced it made a billion-dollar mistake in the way it calculated the quarter ending last September 30th. That was from today's Wall Street Journal.
So to all accountants, CEOs and CFOs - if you feel an error has been made concerning the value of your company based on earning or whatever, please reveal it now. We would all like to get on with our economic recovery. For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 PM.