Workers Weigh Causes And Effects of Accounting Scandals
A survey of employees working for public companies probed the workers' attitudes about the causes and effects of recent accounting scandals. The results, which were made available by Fleishman-Hillard Knowledge Solutions, show concern about corporate greed, short-term financial focus, and the impact of the scandals on the U.S. economy.
Highlights of the findings:
- Causes: The two main causes of recent corporate misbehavior are executive greed and an overemphasis on short-term financial performance expectations. The vast majority of workers surveyed (82%) agree, "Executive greed is driving corporate wrongdoing." A smaller majority (60%) agree, "The stock market forces companies to focus on short-term profit and performance and forces dishonest corporate accounting practices."
- Effects: Most employees see the scandals as affecting the economy, and some say investor demands are weakening the corporate focus on meeting customer needs. The feelings with respect to the economy are very strong: More than nine out of ten employees (91%) agree that the scandals are a serious or very serious problem for the nation's economy, and nearly two out of three (62%) rank the scandals a "very serious" problem for the economy. Feelings about customer focus are almost as strong: Nearly three-fourths (72%) agree that recent pressure to satisfy shareholder expectations has led publicly-held companies to focus more on meeting the demands of investors than customers. A significant minority (41%) say they have observed this trend in their own company.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.