Tuck Holds Panel on Ethics and Corporate Responsibility
FOR IMMEDIATE RELEASE—October 16, 2002
CONTACT: Kim Keating
HANOVER, N.H.—As part of the Tuck School at Dartmouth's effort to integrate further debate on ethics and corporate responsibility into its curriculum, Tuck is cosponsoring several Ethics at Tuck panels. For the first panel in the series, "Making Your Numbers: When does managing earnings become cooking the books?" five experts gathered in Cook Auditorium on October 14 before an audience of MBA students. The experts discussed the state of accounting practices in the wake of the recent spate of dramatic disclosures of gross corporate misconduct. The panel was moderated by Professor Rick Shreve, who teaches business ethics to first-year students at Tuck.
Shreve wryly described the panelists as "a group of people who are practitioners, rules setters, and who dine out on the mistakes that people make."
Panelists included Gary Cypres, chairman of the board and CEO, Hispanic Express and Banner Central Financing; Daniel Dooley, partner, PricewaterhouseCoopers LLP, and head of its national securities litigation consulting practice; Kurt Eichenwald, corporate-corruption investigator and senior reporter, The New York Times; William Parfet, chairman and CEO, MRI Research, former trustee of the Financial Accounting Foundation, and a former member of Financial Accounting Standards Board (FASB)'s Emerging Issues Task Force (EITF); and Edward Trott, member of the FASB and former member of the EITF and the American Institute of Certified Public Accountants' Standards Executive Committee.
The experts were asked to discuss the assertion of some members of Congress and commentators in the media that accounting is a field in which there are clear rights and wrongs and that any attempt to restate earnings, or indeed "manage earnings," was evidence of malfeasance.
Panelists enthusiastically agreed about the irrefutable importance of good accounting and business reporting, "It's not just a game," said Trott.
All were also in accord over the fact that the interpretation of the Generally Accepted Accounting Principles can be something of a gray area.
Cypres admitted that he believed that most CFOs would not quibble with the assumption that earnings are "managed," but he asserted that "fraud is fraud." Dooley and Parfet, both leading accountants, reiterated the profession's commitment to admitting to and dealing with mistakes, while also disciplining wrongdoers. Both stated they were still proud to be accountants.
Questions from Tuck students drew interesting responses from the gathered specialists: When asked if there was more crime these days or just better detection than in the past, panelists agreed that the dramatic nature of recent high-profile collapses was due more to the late 90s market bubble than to an actual increase in incidents of corporate misconduct. Panelists also referred to the healthy development in the corporate environment of "whistle-blowing," which, far from being considered culturally unacceptable these days, is now actively being encouraged.
Professor Shreve ended the session by assuring students, "It's not a rigged game. Most people are trying to do the right thing... The free enterprise system is the best system the world has come up with to manage ourselves."
The next event in the Ethics at Tuck series, "Fraud: Ex-Con Tells All," takes place on November 6, 2002. The talk will address the $100 million ZZZZ Best Carpet Cleaning fraud. Mark Morze, who spent 4 1/2 years in federal prison for his part in the scam, will talk about how and why he did it and about the price he paid.
Ethics at Tuck panels are sponsored by the Office of the Dean at Tuck, the Ethics Institute at Dartmouth College, the James M. Allwin Initiative for Corporate Citizenship, and the Ariel Halpern Endowment.
Founded in 1900, Tuck is the first graduate school of management and consistently ranks among the top business schools worldwide. Information about the Tuck School is available at www.tuck.dartmouth.edu.
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