Ethics takes on new importance in wake of Enron, other scandals

When Enron declared bankruptcy last October and news quickly spread of Arthur Anderson’s deceitful accounting practices, the scandals created a ripple effect that touched everyone from the company’s chief executive officer to stockholders. Now, a year later, the ripple has reached schools as they teach future business people not to make the same mistakes.

More universities are incorporating ethics into their curriculum since Enron’s bankruptcy, and administrators in the Lumpkin College of Business said Eastern is no exception to this trend.

While the college has not changed its curriculum and does not plan to add any new classes, teachers and students are putting more emphasis on ethics in the classroom.

Bill Joyce, an accounting professor, teaches core accounting classes to students just entering the school of business. He said in the past students have been lukewarm to the topic of ethics, but now they are “perking up and listening more” when the subject is approached in class.

Joyce said ethics have a stronger presence in exams, class discussion, lectures and guestsspeakers in the past year as a direct result of the Enron scandal.

“(Accounting teachers) have been going out of their way to include discussion about the scandal in class,” said Michael Boroom, chair of the business department.

Boroom said the recent deceptions at Arthur Andersen suggested more people were concentrating on how to make money and ignoring the ethical side of the accounting profession.

However, the actions of one Arthur Andersen office, one of the most prestigious accounting firms in the country, Joyce said, had repercussions worldwide. As students begin to realize those repercussions in action, the focus begins to shift back to ethics and not just getting rich quick.

“Now you can’t go anywhere where people are not talking about it,” Joyce said. “Every faction of society … is affected.”

People have lost faith that companies are reporting true revenue and losses, so they are investing less in stock. The lack of integrity in number reporting could be a cause of the downward turn of the economy, Boroom said.

Hiring accountants may also cost companies more money since the scandal, which does not always mean good news for accountants and other business people. As companies spend more money, other areas may have to be cut and people doing the work may not be the ones to see the extra money.

Joyce said he tries to teach his students to think about the personal cost related to whistle blowing or walking away from a dishonest situation.

The business world can come with high pressure, but Joyce teaches students how to deal with that pressure and do “the right thing.” He advises future business workers to bring suspicious or deceitful practices to the next level, no matter how small or insignificant they may seem.

If the person a step higher does nothing, it’s time to leave the company, he said.

“There could be a personal cost to resigning, but there is also a personal cost with staying with a company that is corrupt,” he said.

In addition to heightened awareness, Boroom said he is in the process of planning several workshops highlighting the importance of ethics. The workshops are still in the beginning stages, but they will include students, faculty and certified public accountants who will concentrate on continuing profession education and ethics throughout students’ careers.

“There is a lot more of a focus on doing the right thing instead of doing what everyone else is doing,” Boorom said. “Just because everyone is doing it doesn’t make it right.”