A Cautionary Tale for Silicon Valley Fake it until you make it is an expression that amply describes what happened to Theranos. It also characterizes the actions of the company’s founder and CEO, Elizabeth Holmes. The idea being that by imitating confidence, competence, and an optimistic mindset, Holmes was able... Read more →

Climate Change: The New Kid on the Block information to make informed judgments about the financial condition of companies. This includes events that create possible future obligations based on the outcome of current events where it is not known with certainty whether the outcome will create a liability for a... Read more →

Looking for the Red Flags of Fraudulent Financial Reporting I recently read an article that describes the results of a study that contends in some company bosses are being placed in a position of power when the company needs “aggressive earnings reports”. In such cases, recruiters are more likely to... Read more →

Accounting and Ethics Guidance Overview In the first enforcement action of its kind, the U.S. Securities and Exchange Commission says The Cheesecake Factory falsely claimed its restaurants were "operating sustainably" during the pandemic and it failed to disclose the whole truth about the impact on its business. According to the... Read more →

Does Teaching Ethics Do Any Good? Does teaching ethics work? If teaching ethics does no good, then why are we doing it? The answer may lie in knowing what are (or should be) the goals of teaching ethics. First, let’s discuss what ethics education is not and should not be... Read more →

What is the Public Interest? It’s been about 18 years since Congress created the Public Company Accounting Oversight Board in response to widespread fraud in the financial statements of the likes of Enron and WorldCom. Given the high rate of audit deficiencies identified in PCAOB inspections of public company audits,... Read more →

An Historical Perspective on Professional Ethics MAX BLOCK DISTINGUISHED ARTICLE AWARD: The CPA Journal--March 2018 Issue In Brief The commitment to serve the public interest in accounting has eroded, as personal and business relationships with clients and client management increasingly create conflicts of interest. Many such relationships have created barriers... Read more →

Ethical Obligations and Decision Making in Accounting: Text and Cases I'm proud to announce that McGraw-Hill Education has just published the 5th edition of my Accounting Ethics textbook, Ethical Obligations and Decision Making in Accounting: Text and Cases. I'd like to thank two reviewers of the book and the the... Read more →

Missed Profit and Cash Targets Lead to Firing of CEO General Electric is in trouble. Last week it announced the firing of CEO John Flannery after 14 months on the job as problems developed in its power unit causing GE to warn it would miss profit and cash targets. GE... Read more →

The Case of GE and KPMG A new rule adopted by the U.S. Securities and Exchange Commission requires disclosure of the tenure of a public company’s external auditor in the annual report. KPMG recently reported that it has audited GE since 1909. This raises the question whether there should be... Read more →