• Making it illegal to have liabilities off the balance sheet.


• Barring accountants from providing both auditing and consulting to the same client.

This response seems somewhat surprising in view of two other findings:

• Few executives feel strongly that the accounting profession is responsible for high profile collapses, such as Enron and past meltdowns in Canada.


• Most say they have a high level of confidence in the ethics of the accounting or auditing firm employed by their own organizations. The executives ranked the ethics of their own auditors a very high 6.0 out of a possible 7.

Some press accounts attribute the seemingly contradictory results to differences between big accounting firms and smaller ones. They point out that many survey respondents typically come from small to mid-sized companies not audited by large accounting firms.

When asked how much confidence they have in the ethics of the (presumably larger) firms auditing large publicly traded companies, the executives were decidedly less kind, ranking these firms only a 4.7 out of a possible 7.

View below for details of the survey questions and answers.

	Survey Questions and Answers
		mean score
1.	Thinking of the high profile collapse of Enron and past meltdowns in Canada (e.g. Confederation Life, Northland Bank), how much do you hold the accounting profession responsible? Please use a 7 point scale where 7 means very responsible and 1, the opposite.	4.7
2.	On a 7 point confidence scale where 7 means maximum confidence, how much confidence do you have in the ethics of the accounting or auditing firm employed by your own organization?	6.0
3.	And, as an investor how much confidence (on the same 7 point scale) do you have in the ethics of accounting or auditing firms doing the books of publicly traded companies?	4.6
4.	How closely have you been following the collapse of Enron in the U.S.? Please use a 7 point scale where 7 means you’ve been following it very closely and 1, the opposite.	3.8
5.	When an accounting firm is involved in a high profile accounting failure, are you…	%
	-- A lot more likely to use it	0
	-- Somewhat more likely to use it	1
	-- Unaffected by the issue	18
	-- Somewhat less likely to use it	26
	-- A lot less likely to use it	50
	-- Don’t know/No opinion	4
6.	There’s talk about tougher controls on accounting firms engaged by publicly traded companies. Using a 7 point scale where 7 means very good idea and 1, the opposite, how would you rate the following…	mean score
	-- Make it illegal to have liabilities off the balance sheet	5.5
	-- Bar accountants from providing both auditing and consulting to the same client in order to protect auditing independence	5.3
	-- Make it easier to hold directors, officers, and auditors liable under criminal law for improper conduct	5.1
	-- Make it easier to hold directors, officers, and auditors liable financially for improper conduct	5.1
	-- Take away the incentive to cook the books by prohibiting directors on the company audit committee from owning stock options	4.7
	-- Protect auditors’ independence by requiring companies to hire an auditing firm for a minimum period such as 5 years and not year-to-year	3.9
	-- Create a strong government agency to supervise and discipline accounting firms	3.0