Building a world of
resilient communities.

MAIN LIST

 

'Book cooking still rife' claims Enron whistleblower

More CFOs than ever feel the need to be creative with the accounting...

Speaking on the issue of Sarbanes-Oxley and highlighting the need for tighter compliance legislation, the key whistleblower at the heart of the Enron scandal has warned that 'cooking the books' is still very much a part of corporate America.

Addressing the audience at Better Management Live in Las Vegas, Lynn Brewer, author of Enron post-mortem House of Cards, said: "Enron was the poster-child for corporate corruption but it is clear the factors in existence when Enron imploded are still in place today."

Quoting figures from a recent CFO Magazine survey, Brewer said: "Forty-seven per cent of CFOs today feel pressure to cook the books and 18 per cent of CFOs actually feel more pressure than they did pre-Enron."

Brewer said Sarbanes-Oxley will be vital in bringing these alarming figures down to a more manageable level but added that companies should never have needed such heavy-handed legislation and accompanying threats of jail-time and fines for breaches in the first place.

Brewer claimed one-third of investors see non-financial issues - such as ethical, moral and compliance issues - as a major factor when making investment decisions. She believes knowledge of that fact and the subsequent case for ROI should have made more companies get their houses in order earlier.

Brewer believes post-Sarbanes-Oxley companies will be regarded with a level of suspicion which she characterises as "guilty until proven innocent" - a hangover from scandals such as Enron and WorldCom which means companies now actively have to demonstrate to investors that they are a safe bet.

Lee Dittmarr, principal at Deloitte Consulting, said: "Companies who are known for good compliance get better results. That shouldn't be a surprise to us, it should be common sense."

Editorial Notes: Enron style bookeeping may be a weak point in the economy, accelerating collapse as we enter an age of energy decline. -AF

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Find out more about Community Resilience. See our COMMUNITIES page
Start your own projects. See our RESOURCES page.
Help build resilience. DONATE NOW.

 

This is a community site and the discussion is moderated. The rules in brief: no personal abuse and no climate denial. Complete Guidelines.


The Great Deceleration

The 'Great Acceleration' of economic activity in the past 60 years has led …

New Zine Highlights the Solidarity Economy in St. Louis

It's hard to convey what the sharing movement is about without describing …

The Climate Crisis and Economic Policy Choices

A major issue in climate economics is whether it is possible to halt the …

Patterns of Commoning: Can Commoners Become Self-Aware of Their Collective Potential?

As the idea of patterns of commoning suggests, commons are not objects, but …

The Centre-Left’s Narrative on Climate Change has Convinced No One

The election of Donald Trump reflects the unraveling of the centre-left …

Money for Everybody

The Netherlands will kick off the year 2017 by launching an experiment with …

Portugal Announces World’s First Nationwide Participatory Budgeting Project

Participatory budgeting is becoming increasingly popular, with more than …