There`s a popular country song on the charts which lays out some really stupid choices a man made, each one ending with the chorus of “What was I thinking?” I was reminded of that song by a recent Wall Street Journal article about the disclosure of some, ahem, questionable dealings by PricewaterhouseCoopers.
In a nutshell, it seems that the company`s accountants were negotiating travel arrangements that cost more than they had to, billing their clients those “inflated” amounts and pocketing cash rebates from the travel companies.
Huh? “What were they thinking?”
Lest you think this an insignificant blip on the screen, the firm agreed to a lawsuit settlement valued at $54.5 million relating to this indiscretion. At the time of PricewaterhouseCoopers settlement in early January, a similar suit was pending against Ernst & Young, LLP, and KPMG, LLP.
Can this possibly be the same professional group that I worked for in the early 1970s? I can`t believe it!
By contrast, this is how it used to be.
While I was working for Ernst & Ernst, predecessor of Ernst & Young, the firm voluntarily assumed the liabilities of a national non-profit organization because an Ernst partner sat on the board and they felt banks “may” have loaned money to the non-profit because of the firm`s affiliation. The ticket wasn`t cheap – more than $1 million. Can this be the same group who is now stooping to unethical and apparently illegal means to take advantage of their clients for travel rebates?
CPAs are among the hardest working, most ethical people I have ever dealt with. Unfortunately, criticism of the accounting profession has spread with a broad brush and taints all the CPAs in small firms and solo practices whom, as I write this column, are working extremely long hours to serve their clients. It`s not fair, but it`s true.
Throughout recorded history, societies have radically swung from attitudes of extreme conservatism to extreme liberalism. Not only is that true in politics, but the morality of society swings from side to side too. Our country has certainly been a part of that roller coaster ride. Sad to say, my generation has not lived up to the standards set by our predecessors. Former President Bill Clinton is probably the best known rascal of the Baby Boom generation. Those of us who fall into that age group are in positions of leadership now and we aren`t doing a very good job.
The accounting scandals of the past few years have instilled a lack of confidence in the leadership of our major companies. The well-publicized greed of the plaintiff attorneys is nauseating. The power of the healthcare industry lobby has replaced the labor unions as the dominant influence in national and state government. We have really gone downhill since old Ernst & Ernst acted selflessly to avoid the appearance of impropriety that might result from one of their partners being associated with a failed non-profit.
Society has to hit bottom before the pendulum begins to swing the other way. I believe that we have arrived at such a bottom. I believe that the next generation will conduct itself better than has our group. This is more than wishful thinking; I have some evidence to support my conclusion.
Author Jim Collins has written several books of late that have captured the attention of business readers around the world. “Built to Last” and “Good to Great” each have sold more than a million copies. These aren`t books on sex and violence mind you, but books that deal with responsible behavior by business leaders. Instead of saluting well-known billionaires who have become famous clawing their way to the top without concern for the people they’ve stepped on, he makes heroes out of little known people who built smaller, but solid companies in the 1970s and 1980s.
When people start spending their time thinking about not only what they can accomplish but also how they accomplish it, the stage is set for better days. The fact that books on simple business ethics are on the best seller lists is strong indication that the wind is changing direction.
I am embarrassed by many of the antics of my generation. However, I am comfortable that better times will come as people rebel against fraudulent and slovenly behavior by our leaders and raise only those to power who have a personal code of conduct beyond merely “what`s in it for me.” Then, the youngsters will look back on our history and say, “What were they thinking?”
Thought for the Moment – Anyone, then, who knows the good he ought to do and doesn`t do it, sins. – James 4:17
Joe D. Jones, CPA, is publisher of the Mississippi Business Journal. Contact him at email@example.com.