Dear FRONTLINE,I thought Bigger Than Enron was an excellent program. An excellent case was made for reform of the accounting profession. And, well placed blame on our elected political representatives was also presented. But what seemed to be lacking was in depth criticism of the Boards of Directors. When Boards claim "they don't know what was going on" when something goes sour, this explantation seems to be accepted by government investigators and the public. Directors are charged with a fiduciary responsibility and they need and should know what is going on. Board members should have the necessary qualifications and skills to perform their responsibilities. When matters go wrong they must be held accountable.
Harvey Marsh
la canada flintridge, ca
Dear FRONTLINE, Outstanding program. I am glad that for once the interviewer did not flinch from asking the tough questions.
The conclusion, as usual is that the Congressional power houses are corrupt, that so called "free speech" money is bribery pure and simple. The legalized bribery of government in the US is called corruption in all other countries.
Politicians go back on their "promises" during election time and don't want to be held accountable for previous mistakes.
So what can we expect from Wshington? More money grubbing for their own benefit on the part of everyone from the President on down to the last Congressperson. Evidently what we need is a third party of honest politicians. But then, the general public is so accustomed to
getting freebies from DC that they too have been corrupted. Lets just be honest about it all and cease calling this a real democracy. The US is is ruled by the highest bidders.
Gunther Steinberg
portola valley , ca
Dear FRONTLINE, Excellent program... I can understand the accounting firms resistant to change in the way they do business. But WHY are the mutual funds, pension funds, brokerages etc. not pushing twice as hard for changes??? Mik
toronto, ontario
Dear FRONTLINE, I want to thank Frontline for painting an objective indepth picture of the relationship between the Congress, White House, major corporations, and the auditing firms. The real problem appears that the most powerful and rich can achieve their personal goals without regard for the good of the citizens, community and country. Yet, citizens suffer the consequences of these actions. How can one craft a long term solution, when those responsible for the policies, are solicting money from the players?
Ronald Putz
columbia, md.
Dear FRONTLINE, Your program inspired me to email my Senators about this situation. I want to attach a link to ask others to do the same. http://www.senate.gov/contacting/index.cfm Here is the email I sent... I am 33 years old and this is the first time I have ever written my Senators. I have always voted and felt very confident in Missouri's Senatorial Leadership. I say this to let you know just how troubled I am about this issue. I hope you were able to watch the Frontline special last night on PBS about the accounting and investment banking troubles uncovered by the Andersen/ Enron situation. If not, I encourage you to get the transcripts from pbs.org/frontline/shows/regulation/. This situation is very troubling. If we do not have sound accounting principles, our Free-Market system will suffer in unimaginable ways. Even if it is a perceived issue. We have to have absolute trust in the accounting systems. Without trust we could face what Argentina and Japan has recently realized. Let me know how I can help. I am in the Investment Banking industry. Although you may not be on the appropriate committees to initiate changes I believe you have influence with them. I support the break up of the Big 5 (now 4) accounting firms in regards to consulting and auditing. I DO NOT support SEC Chairman Pitt's plan unless it is coupled with legislation that prevents auditing firms from providing consulting practices. The same should be applied to Investment Banking firms.
Clint Walton
kansas city, missouri
Dear FRONTLINE, I am an accountant and an attorney. Both fields of professional practice that are "supposed" to be highly regarded for professional ethics and integrity. Unfortunately, when "money" is the chief measure of how business operates, it is no wonder why America seems adrift in high-level corporate and accounting scandal. Yes I am cynical. Our justice system is deadly serious about locking up forever the predator career criminals. What about three strikes for white collar corporate and accounting criminal predators? What about any criminal sanctions? Enron, Sunbeam, Waste Management, Arthur Andersen and surely hundreds of other companies are costing the American taxpayers and investors billions of dollars. Just not happy with our political and justice sytem's responses to the continuing parade of corporate and accounting debacles! I am especially disenchanted with the response from our nation' prinical corporate watch-dog, the head of the SEC. Keep up the great work! CBS, ABC and NBC don't seem to have a clue! Their stuck on reporting who won the lastest episode of their "survival" tv show.
Darryl M. Brown
sacramento, ca
Dear FRONTLINE,
I watched your show with great interest last night, due to my family's several centuries in the investment industry and my skills as an accountant.
What I missed was an in-depth discussion of blatant conflicts Mr. Pitt has with the SEC in the past and the SEC's inability to enforce obvious infractions of rules & guidlines, that Mr. Levitt briefly touched upon. Mr. Pitt continues to test the tolerance of industry watchdogs and the public as he mimicks attempts at reform, all the while he continues to protect his former clients as a lobbyist who championed limiting the liabilites of accountants and Corporate Executives who knowingly mislead investors. Mr. Pitt knows this better than anyone. All one has to do is examine his activities during the mid-90s, and observe his reluctance to impose stiff jail sentances for the type of collusion we are witnessing. Regarding the comments made by one of your last guests regarding collusion of Wall St. & the Accounting Profession to help listed companies "cook" the books, I can confirm from first hand experience that the Andersen/Enron activites reflect a culture well entrenched in the accounting profession to "protect" their auditing clients. Furthermore, it was my experience that the "Big Six" purposely "low-balled" auditing fees, and actually risked losing money for auditing engagements in order to generate lucrative fees for management consulting. It also helped put smaller, capable audititng firms out of business and reduced the need to look over their shoulders when conducting audits. I witnessed first hand, my firm's attempt to hide obviously misleading financial statements in order to maintain the relationship with the client.
john crowley
ny, ny
Dear FRONTLINE, Dear Frontline I am a CPA and very proud of it. I found your show last night to be outstanding and VERY fairly presented the truth about the Big 5 (now big 4) accounting firms. There are two reasons for all the problems we now have in financial reporting: First, the big 4 firms do not ever mention that they are CPA firms. If you look at their websites and view their tv ads, notice that those three magic letters "CPA" NEVER EVER appear? Again, look at their websites under services offered. Auditing and accounting is NEVER mentioned. The new phrase is "Assurance services" The big 4 firms act as though they are ashamed and embarassed to be CPAs who perform audit and accounting work. Why are they so ashamed of this? Clients pick up on this and do not value the audit the way they should. This causes lower fees. The second problem is why are clients paying for audits? A seperate pool of money should be created and auditors should be paid from that pool. Of course auditors are not independent. They are paid by the people they are auditing. None, I repeat, NONE of these new proposed standards will work as long as auditors are paid by their clients. GREAT SHOW!!!!!!!!
David Youngwood
new york, new york
Dear FRONTLINE, Dear Frontline: One of the previous comments posted here referred to the corruption from within that brought down the Roman Empire. It brought to mind a line toward the end of ìI, Claudius,î from that other worthy PBS series, Masterpiece Theater. As the aged Emperor Claudius agrees to marry his infamously corrupt niece, Agrippinilla, he repeats, ìMay all the poisons lurking in the mud hatch out.î As disappointed as I am that the Vice Presidential candidate for whom I (and the majority of the country) voted turns out to be implicated in these cover-ups in order to obtain campaign funds from Connecticut financial institutions, I can only hope that this current ñ even worse ñ ìAgrippinillaî type of administration will allow many of the corruptions lurking in the mud of our political/financial system be brought into high relief and thus being able to see them, we are able to clean them up appropriately. Of course, we also require the excellent in-depth reporting from programs such as Frontline and Bill Moyersí Now in order to better educate ourselves on these important, often overlooked issues. Thank you, PBS!
B.L. Jay
dayton, ohio
Dear FRONTLINE, I tuned in late during tonight's program, however I watched it with great interest and a equal sense of disgust at our failed system of 'check and balances'. I am not surprised that investors are leery, they should be.
t toombs
mineral, virginia
Dear FRONTLINE, Three organizations are complicit here: the SEC, the AICPA, and the IRS. Differences between tax reporting and financial reporting should be greatly reduced, if not eliminated. The reasons for these differences are not significant compared to the harm done by allowing accountants to make "professional judgements," because this has been clearly abused by the accounting industry. The market is smart enough to interpret the results. The AICPA and the accounting industry should be forbidden to lobby or make political contributions. They have clearly abused the privilege. The IRS (and Congress) must revise the tax code to re-emphasize dividend payments to shareholders so that the value of shares is more closely tied to the present value of an expected future dividend payment stream. Furthermore, the IRS should greatly limit corporate loss carry backs and carryforwards and greatly reduce the tax incentives for buying and selling of corporate entities that has generated an continuous liquiditation of corporate entities and made a sham of the "continuing entity" assumption that is a basis of financial reporting.
The "Market" can only make correct decisions when given correct information. It is the SEC's responsibility to assure that the information provided to the public is correct, and the SEC must be empowered to do this.
Bob Bennett
littleton, co
Dear FRONTLINE, Tonight's report was a kind of populist claptrap rarely seen on Frontline. For example, how could you possibly mention Clinton's 1995 veto of the Securities Litigation Reform Act without mentioning the fact that Lerach was a major Clinton supporter? You made the veto override sound like a vast green-visored conspiracy, when in fact it was a massive backlash against a dubious veto of sound legislation. And there is certainly no reason to believe that the veto would have somehow saved the public from Enron's crooked off-balance sheet vehicles; to imply otherwise is completely irresponsible. Your discussion of employee options is similarly simplistic.
The issue is not that options should be taken as an expense, but rather that they shouldn't be both _not_ taken as an expense _and_ taken as a deduction. You ignored several serious issues (e.g., the massive amount of cash that companies are able to _take in_ by employees executing options), and you made no effort to differentiate non-qualified options from incentive stock options. By not discussing (or perhaps even understanding?) the difference -- which is deeply relevant to the debate -- you leave your viewers confusing the Silicon Valley rank-and-file with the ilk of Al Dunlop or Ken Lay. I'll stick to reading the Wall Street Journal for accurate coverage of these complex issues; your correspondent would be well-advised to do the same.
Bryan Cantrill
san francisco, california
Dear FRONTLINE, Another wonderfully informative expose on a fundamental problem with America today. Unfortunately, the corruption of the American financial accounting standards is too complicated and uninteresting for most citizens to care about. But it hurts anyone whose 401K account contains stocks touched by mistated earnings, off balance sheet debt, and the general lack of investor confidence caused by laxity in accounting standards. In short, all of the investing public. That public and the public interest has paid dearly and directly to the modern corporate Robber Barons for its complacency. For all of us who understand this folly we should raise this issue with our Congressmen and support anyone who has the voice to take this grievance from acknowledgement to action. Frontline has given us an understanding of the problem. It is up to us to do something about it!
Bill Westerfield
davis, ca
Dear FRONTLINE, We congratulate FRONTLINE on their investigative report. It is reminiscent of the integrity exuded by Murrow and Moyers. Regrettably, the suspicion and mistrust of Wall Street, which we have viscerally acknowledged, has evolved into despicable cerebral recognition. We intend to halt our 403b contributions...we offer our condolences to those hard-working, industrious, and honest Americans who must endure the consequences of an egregiously selfish and covetous corporate America.
S. Lucero
chula vista, ca
Dear FRONTLINE, Frontline, as is typical in its history, presented a balanced presentation (of Eron and the political connections that allowed Eron to "legally" rape the consumer). Unfortuately, we are only now, just hearing any of the truth from the main steam media, that Frontline presented. As to whether or not there will be any correction (by business or the politicians) to this problem, I remain skeptical. But I do say with absolute assurance, that if we as the voting public do not exercise our responsibility to be informed and vote, the problem will not go away and instead will likely worsen. Most, if not all of our past, current and future ethical problems have occured because we the voters did not demand otherwise. We say there is not enough time in our day, or what difference would it make. Well, for most of us (if the truth be known), there is time if we want to make it, and in just doing that act alone, you have begun to make a difference. Because when you take that time and discover just how BAD things really are, I promise you that you will be so pissed off, you would get off your death bed to vote. And if our politicians know we WILL to vote them out of a job if they don't responds to our demands, they will start to toe the line.
ashland, or
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