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Cooking the Books: Accounting Scandals in Corporate America

  • Chuck Colson Chairman of Prison Fellowship Ministries
  • 2002 9 Jul
  • COMMENTS
Cooking the Books: Accounting Scandals in Corporate America
I don't invest in the market; I don't have time. But I do have a retirement fund that's managed for me. It is considerably more anemic than it was some months back, and that is a cause of concern. I'm also concerned because when the market is down, contributions to Prison Fellowship decline.

But the news about Wall Street is more troubling than the impact on retirement portfolios or giving to the ministry. We're watching the unraveling of a big segment of corporate America.

Look at the WorldCom MCI debacle. The chief financial officer hid billions of dollars in liabilities and took them off the corporate books, falsely inflating the company's cash flow. Auditors from Arthur Andersen -- you remember them from Enron -- missed it. And they deceived some of the biggest banks in America. Similar news is coming from Tyco, Xerox, Global Crossing, Adelphia, among others. Arthur Andersen, convicted of a felony, will probably not survive. And now, of all people, we have Martha Stewart with allegations of insider trading and cartoons showing her tidying up a jail cell.

One or two cases could be explained. There are always a few bad apples, but this seems to be touching banks, accountants, and companies across the board. And the stock market is taking a beating as investor confidence plummets. It's an ethical crisis, but not surprising.

Recently I met a business school professor whom I greatly admire. He told me that at his school, there's no attempt to teach ethics because the faculty can't agree on objective standards. He went on to say they rely on kids to have learned ethics before they get to business school -- good luck.

Let me mention again the case of Harvard Business School. For years ethics courses there were pure pragmatism. Then they gave up teaching ethics, returning twenty million dollars to a friend of mine who had endowed the ethics course. What they discovered was that without absolute values, which historically came from the Christian revelation, they couldn't teach ethics. I did a quick survey thereafter of other business schools and found the same thing.

We're captive to this culture of relativism. There's no truth, so who are we to impose our values on anyone else? All anybody can do -- like a business school teacher -- is help people think through problems and arrive at their own conclusions while telling them that no conclusion is any better than any other -- a formula for disaster.

This is what modern worldviews teach. But what happens when you allow people to arrive at their own moral conclusions? They do what is right in their own eyes, and we end up with the likes of Enron and WorldCom.

But this is an opportunity for Christians to make an apologetic case that a free society can't survive without standards of virtue. And those standards have always been informed by Christian truth. The secular elites and a lot of our neighbors tell us we shouldn't be imposing our views on others -- okay. But until we recover a sense of absolute moral truth, we're going to continue to see scandals, and we'll also see our portfolios decline. I wonder if the people will be so eager to dismiss us as "religious bigots" when they realize that it's the lack of ethics in our society caused by the abandonment of a Judeo-Christian consensus that's causing them to lose their retirement plans. This ethical crisis poses a direct threat to the millions of Americans who directly or indirectly own stock.

Who wants to hear what these Christians believe? I submit that if we make the case right, it would be anyone who owns stock in a publicly traded company in America today.

For further reading:

  • Charles Colson and Nancy Pearcey, The Christian in Today's Culture (Tyndale House, 1999).
  • Howard Kurtz, "The Corrosion of Public Trust," The Washington Post, 1 July 2002.
  • Mike Allen, "Corporate Penalties Planned," The Washington Post, 1 July 2002, A4.
  • Ben White, "Note Appears to Back Stewart: But Investigators Still Have
    Doubts about Her Explanation," The Washington Post, 2 July 2002, E03.
  • BreakPoint commentary no. 020514, "Getting over Ourselves: Why We Cheat."
  • BreakPoint commentary no. 020415, "Sharks, Stools, and Secularism."
  • Charles Colson, "The Cultivation of Conscience," a commencement address to the graduates of Wheaton College, 1 June 2000.
  • Charles Colson, "Doing the Right Thing," a baccalaureate address at Parkview High School in Lilburn, Georgia, 19 May 2002.

Copyright 2002 Prison Fellowship Ministries. All Rights Reserved.

Visit the Breakpoint website at http://www.breakpoint.org

For more information about Chuck Colson and Prison Fellowship Ministries, visit http://www.prisonfellowship

 





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