To hear Washington Post columnist Sebastian Mallaby tell it, the accounting profession's lobbying effort is a laugh a minute led by the "clown princes of accounting." He claims the profession's arguments are so hilarious that accountants are in danger of losing their long-standing reputations for being "dependable but boring." Indeed, the only salvation, as he sees it, is a dose of reality in the form of legislative reforms.
Examples of the profession's "comical" expressions:
- A few bad apples. Accountants say there is no widespread problem of wacky bookkeeping, just "a few bad apples" in the business. Mr. Mallaby finds this statement laughable when taken together with the number of firms (nearly 1,000) that restated earnings in the five years that ended in December 2001 and the recent headlines about Enron, Global Crossing, Adelphia, Xerox and WorldCom.
- Culturally pervasive problems. Accountants say the problems are not their fault, but instead have arisen due to cultural problems associated with pressures exerted by irrationally exuberant capital markets. Mr. Mallaby says the notion that culture should be used as an excuse would be funny all by itself. But, combine it with the seemingly contradictory notion that the corporate scandals are isolated exceptions involving only "a few bad apples," and it gets really hilarious.
- Unintended consequences. Accountants say that government regulation, particularly the audit regulations proposed in the Sarbanes bill, will have "unintended consequences." Mr. Mallaby says this is surely a joke when contrasted with the unintended consequences that come from not regulating auditors. If you don't find this argument laughable, he suggests, "Ask the employees and shareholders of WorldCom, who have lost jobs and savings."
- A burden upon business. Accountants say that audit reform would represent "a burden upon business." Mr. Mallaby says this is a real knee-slapper compared with the burdens of a lack of audit reform. In the current business environment without audit reforms, both business leaders and investors have been weighted down as the recent run of audit scandals spooked the stock market, making it harder for businesses to raise cash.
All joking aside, there is no doubt that some serious, well-intentioned phrases can be funny when taken out of context. But the accounting profession has had a long tradition of undertaking serious and successful lobbying efforts involving well-respected thought leaders and logical, persuasive position papers. If and when these documents become available to the public, I'll submit the other side of this story to AccountingWEB for possible publication.