What do you think?
Rate this book
Following the Money: The Enron Failure and the State of Corporate Disclosure
"A Brookings Institution Press and American Enterprise Institute publication
A few years ago, Americans held out their systems of corporate governance and financial disclosure as models to be emulated by the rest of the world. But in late 2001 U.S. policymakers and corporate leaders found themselves facing the largest corporate accounting scandals in American history. The spectacular collapses of Enron and Worldcom—as well as the discovery of accounting irregularities at other large U.S. companies—seemed to call into question the efficacy of the entire system of corporate governance in the United States.
In response, Congress quickly enacted a comprehensive package of reform measures in what has come to be known as the Sarbanes-Oxley Act. The New York Stock Exchange and the NASDAQ followed by making fundamental changes to their listing requirements. The private sector acted as well. Accounting firms—watching in horror as one of their largest, Arthur Andersen, collapsed after a criminal conviction for document shredding—tightened their auditing procedures. Stock analysts and ratings agencies, hit hard by a series of disclosures about their failings, changed their practices as well.
Will these reforms be enough? Are some counterproductive? Are other shortcomings in the disclosure system still in need of correction?
These are among the questions that George Benston, Michael Bromwich, Robert E. Litan, and Alfred Wagenhofer address in Following the Money. While the authors agree that the U.S. system of corporate disclosure and governance is in need of change, they are concerned that policymakers may be overreacting in some areas and taking actions in others that may prove to be ineffective or even counterproductive.
Using the Enron case as a point of departure, the authors argue that the major problem lies not in the accounting and auditing standards themselves, but in the system of enforcing those standards.
"
A few years ago, Americans held out their systems of corporate governance and financial disclosure as models to be emulated by the rest of the world. But in late 2001 U.S. policymakers and corporate leaders found themselves facing the largest corporate accounting scandals in American history. The spectacular collapses of Enron and Worldcom—as well as the discovery of accounting irregularities at other large U.S. companies—seemed to call into question the efficacy of the entire system of corporate governance in the United States.
In response, Congress quickly enacted a comprehensive package of reform measures in what has come to be known as the Sarbanes-Oxley Act. The New York Stock Exchange and the NASDAQ followed by making fundamental changes to their listing requirements. The private sector acted as well. Accounting firms—watching in horror as one of their largest, Arthur Andersen, collapsed after a criminal conviction for document shredding—tightened their auditing procedures. Stock analysts and ratings agencies, hit hard by a series of disclosures about their failings, changed their practices as well.
Will these reforms be enough? Are some counterproductive? Are other shortcomings in the disclosure system still in need of correction?
These are among the questions that George Benston, Michael Bromwich, Robert E. Litan, and Alfred Wagenhofer address in Following the Money. While the authors agree that the U.S. system of corporate disclosure and governance is in need of change, they are concerned that policymakers may be overreacting in some areas and taking actions in others that may prove to be ineffective or even counterproductive.
Using the Enron case as a point of departure, the authors argue that the major problem lies not in the accounting and auditing standards themselves, but in the system of enforcing those standards.
"
126 pages, Hardcover
First published February 26, 2003
6 people want to read
About the author
George J. Benston
17 booksGeorge J. Benston graduated from Queens College in 1952 and earned his MBA in accounting and taxation from New York University in 1953. In 1963 he earned a Ph.D. in economics from the University of Chicago.
From 1987 to his death he was professor of finance, accounting and economics at Emory University and its Goizueta Business School, Atlanta.
Before that prof. Benston was employed on the faculty of the University of Rochester for 21 years.
From 1987 to his death he was professor of finance, accounting and economics at Emory University and its Goizueta Business School, Atlanta.
Before that prof. Benston was employed on the faculty of the University of Rochester for 21 years.
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
No one has reviewed this book yet.