A valuable Reminder.

• Author: Waters, Susan
• Position: From The CEO - Values

We lived a lie. In the 1990s--in the financial markets and corporate governance--we lived a lie. We knew that many companies were overvalued, that their stock prices were improbable, and that we were making too much money in our retirement and other accounts. We knew that many of the Silicon Valley successes were impossible, so we called them a miracle (and so it would have been, had it been true). It wasn't only CPAs who knew these things--virtually everybody in the country knew them.

We hoped the economy wouldn't hit a wall quite as hard as it did--that maybe we could slide to a soft landing and keep most of the gains we earned. That didn't happen.

VALUES LOST

Some CPAs went along for this ride, proving that CPAs are as human as the rest of us. The '90s were a decade in which the country lost its values. We knew that measuring virtue in dollars was wrong. We knew it wasn't possible to become so rich so fast. We knew that we shouldn't be leaving so many of our fellows behind economically. But we tried to kid ourselves about these things. And now the day of reckoning has come.

GRAPPLING WITH PARADOX

The main issues that I grapple with are those that affect the public's confidence in the accounting profession. With the Enron bankruptcy, the indictment and subsequent conviction of Andersen, and the other corporate scandals and restatements, we have much to do.

We have learned how much the public trusted and relied upon CPAs to protect them from a group that they never trusted--corporate CEOs. The real shock to the public has been finding out that CPAs aren't able to catch everything, tell everything and stop everything that's bad from happening.

This relates to a paradox in American thinking--many believe that the very foundation of our government is based on the notion that governments rule by the consent of the governed and that the government that governs least governs best. At the same time, when we feel damaged, hurt or threatened we say, "There ought to be a law."

Since Sept. 11, 2001, and the Enron and other corporate failures and scandals that followed so quickly on the heels of the terrorist attacks, we have been in a "There ought to be a law" phase.

LOOKING FORWARD

During the coming year, we will face the implementation of Sarbanes-Oxley, recently passed California...