Scandals Are a Hot Topic in College Courses

Scandals Are a Hot Topic in College Courses: "

(HeraldNet) -- Recent ethics scandals at the Boeing Co., Enron and other corporations are providing up-to-date case studies for college business schools, professors said.

University of Washington finance professor Jonathon Karpoff said he plans this week to start discussing the issues that led to the resignation of Boeing chief executive Phil Condit with his students who are pursuing their doctorates.

And at Edmonds Community College, accounting instructor Andy Williams said he hands out copies of newspaper stories about finance officers going to jail.

Ethics discussions have 'filled up my accounting classes,' said Williams, who also teaches part-time at Seattle University. 'It gets students interested. It illustrates some of the key points.'

For Williams, the accounting scandals at WorldCom and Enron have been particularly useful. WorldCom's accountants misstated billions of dollars worth of expenses to make the company look more profitable, while Enron's chief financial officer admitted Wednesday that he and other top managers had manipulated public financial statements to mislead investors and boost the company's stock prices and credit ratings.

The lesson for accounting students to learn, Williams said, is that 'standards are more important to them than any one job.' Whistleblowers sometimes pay a high personal cost, but 'the costs of not taking a stand are greater.'

The Boeing ethics issues came to light so recently that Williams said he hasn't had time to incorporate them into his curriculum. In late November, chief financial officer Mike Sears was amid allegations that he had offered a job to the Pentagon weapons buyer who was negotiating the 767 tanker deal. Boeing also fired the former Pentagon official, Darlene Druyan.

'I could see doing something about that when we get to a lesson on conflicts of interest,' Williams said. 'Even if there were no objective conflict of interest, the appearance was there.'

For Karpoff's graduate students, the lessons are more subtle.

In general, corporate scandals are costly, he said. 'Firms pay pretty heavily through their lost reputations.'"