what have we learned from the enron fiasco?
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What have we learned from the Enron Fiasco?. “When Lawrence Summers spoke from his U.S. Treasury Pulpit, he preached that no innovation was more important to the success of the U.S. capital markets than “Generally Accepted Accounting principles”. - PowerPoint PPT PresentationTRANSCRIPT
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What have we learned from the Enron Fiasco?
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“When Lawrence Summers spoke from his U.S. Treasury Pulpit, he preached
that no innovation was more important to the success of the U.S. capital
markets than “Generally Accepted Accounting principles”
Conclusion: The U.S. economy relies heavily on credible accounting information.
(Wall Street Journal, February 2, 2002)
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“The U.S. continues to have one of the world’s most rigorous accounting systems, and most companies clearly function within the rules … But just as investors ultimately turned away
from overhyped tech stocks during the Internet bust, in the wake of Enron those same investors clearly have no stomach for any hint of accounting irregularities … fears of a new
mini-Enron spur share sell-offs at the slightest whiff of accounting problems.”
Conclusion: Corporations who care about their stock values have strong incentives to invest big bucks in credible accounting reports and honest and talented auditors.
(Wall Street Journal, January 30, 2002)
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“As the collapse of Enron has made painfully clear, the complexity of corporate accounting has grown exponentially. What
were simple and objective concepts, like sales and earnings, in many cases have
become complicated and subjective … This is true not just for investors, but for Wall
Street analysts, corporate executives with MBAs, and sometimes even outside
auditors reviewing a corporation’s books.”(Wall Street Journal, January 23, 2002)
Conclusion: Students who don’t invest the time and effort needed to understand accounting statements will be placing themselves in a very vulnerable position in the real world.
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Overall conclusion:
A thorough understanding of accounting may be tough to
attain, but it is critical for business success, and very
valuable on the marketplace.
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Are there accounting jobs available and what do they
involve?
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LA Times, “Go Figure: Accounting is Hot Job – Slow Economy, High Demand Add up to Big Career.”
Looking for a hot career?
Think number crunching!
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“That’s right. Even in this rapidly slowing economy – and in part because of it –
accounting and related services are very much in demand, with graduates getting multiple job offers and accounting firms
competing with technology and entertainment companies for the
brightest ‘bean counters.’”
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And accounting is no longer confined to just calculators and spreadsheets. The profession
requires regular interaction with top-level management. “I’ve worked on traditional
audits, business plans, and an initial public offering, for a company,” said a 23-year old
senior accountant at KPMG in Orange County. ”I’ve had a chance to work with high-tech companies, the entertainment industry,
financial service clients, traditional manufacturing, health care … and I’m getting
to work with senior management at those companies.”
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Jacques Rioux, Professor at Drake University: “If we could produce 40 accounting graduates,
businesses would hire 40. If we could produce 100, they’d hire 100.”
Betty Chavis, Chair of Accounting Department at Cal State Fullerton, “Our top students are
getting three to five job offers … and the demand for students seems to be getting
stronger.”
And these quotes come from a time when the U.S. economy is slow.
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•Professional Services•Industry•Government
Who are the major employers?
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Andersen, LLPDeloitte & Touche, LLP
Ernst & YoungKPMG
PriceWaterhouseCoopers, LLP
Top Five Professional Service Firms...
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Accenture American ExpressBear, Sterns & Co., Inc.BKD LLPCap GeminiClifton Gunderson LLCCrowe, Chizek & CompanyGrant ThorntonKatz, Sapper & MillerV4 Consulting
Other Professional Service Firms...
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Industry...American United Life Insurance Co.Dow Chemical CompanyEli Lilly & CompanyBank One CorporationIBM CorporationMotorola, Inc.Cummins, Inc.Deere & Co.FordLockheed Martin Control SystemsProctor & Gamble CompanyRolls-Royce CorporationQuaker OatsSubaru-Isuzu Automotive, Inc.
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Government...
• CIA• FBI• U.S. Army• GAO
• Indiana University
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How does Indiana University’s Accounting program prepare
you for these careers?
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•World Class Curriculum
•World Class Facilities
•World Class Faculty
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World Class Curriculum 1. University of Texas 2. University of Illinois 3. Brigham Young University 4. University of Southern California 5. University of Florida 6. University of Notre Dame 7. University of Michigan 9. Arizona State University 10. University of Pennsylvania
Public Accounting Report ranked our Accounting Program...
8. Indiana University*
* The only program in the U .S. that offers an MBA in accounting
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FreshmanSophomoreJunior
MBAa degreeMPA degree
ISS
MBAa
Senior Corecurriculum
Tax trackConsulting trackE-Business trackAssurance track
Year 1Year 2Year 3
Year 4
Year 5
IU Accounting Programs
Admission
Tax trackConsulting trackE-Business trackAssurance track
4 ½ year option(with summer courses &2 spring internships)
4-year degree holders
Bachelors degree
Other Schools
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World Class Facility
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MBAa Students “Plugged In” MBAa Students “Plugged In”
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New Corporate & Graduate Center
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World Class Faculty
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Faculty
• Steve Baginski
• Daniel Beneish
• Walt Blacconiere
• Joe Fisher
• Jim Grandorf
• David Greene
• Mike Groomer
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Faculty
• Les Heitger
• Peggy Hite
• Pat Hopkins
• Laureen Maines
• Jerry Salamon
• Geoff Sprinkle
• Jim Wahlen
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Should I look into Accounting
as a major?
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YES NO
Am I willing to put in the effort to be the best
I can be?
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YES NO
Am I interested in joining a highly-
respected profession?
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YES NO
Do I want to be well compensated?
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Do I want a career that provides limitless
professional options and paths?
YES NO
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YES NO
Am I willing to put in the effort to be the best
I can be?
Curriculum is challenging, interesting, and broad.
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Financial Accounting Standards BoardThe mission of the Financial Accounting Standards Board is to establish and improve standards of financial accounting and reporting for the guidance and education of the public,
including issuers, auditors, and users of financial information.
YES NO
Am I interested in joining a highly-
respected profession?
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YES NO
Do I want to be well compensated?
Business-Undergraduate $43,000Masters of Business in Accounting $52,000*
* Does not include signing bonuses.
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Do I want a career that provides limitless
professional options and paths?
Yes NOPartner in professional service firm (assurance, tax, business advisory), chief financial officer, controller, professional consultant, investment analyst, etc...
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Summary
Most sophomore undergraduate students are not exactly sure what
career choice is best for them.
(1) Keep your options open, and(2) Challenge yourself with a rigorous
curriculum that adds value
So what should you do?
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Panel Members...
Holly Klaasen -
- Adam Rooks
- Keith Puckett
Linda Tansel -
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Panel Members...
- Brian Newton
Marcy Simpson -
- Bobby Samuel
Lindsey Ross -
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Panel Members...Holly Klaasen– BKD, LLP
Keith Puckett – Bear, Sterns & Co., Inc.
Adam Rooks – Cummings, Inc.
Linda Tansel – Deloitte & Touche
Marcy Simpson – Indiana University
Brian Newton – KPMG, LLP
Lindsey Ross – Rolls Royce
Bobby Samuel – V4 Consulting