Professor Elam

Obviously accounting has been in the headlines the last few years for the wrong reasons-to say that Ken Lay et al were ethically challenged is an understatement.  What amazes me is how often people lie when the truth might well serve them better, here are two cases in point.

Recently the President of Radio Shack resigned. It seems he had claimed he possessed two college degrees from Heartland Baptist Bible College of all places.  It turns out he never graduated.  He had been hired at R/S because of his innovative ideas.  Wouldn’t it have been a better idea to find a school in the DFW area and finish as an incentive to his employees?  Or point out that one can rise to accomplishment with out a degree, though having one is a great idea? And while I am on the topic, if one is engaging in an outright lie, why like about a  college that few people have ever heard of anyway?

As you are working and paying for your degree, I trust I do not have to outline just how maddening it is for someone to falsify their record to match yours if in fact you have a degree. R H Donnelly Corp boss

Here is another example from the latest Forbes magazine.
David Swanson does not have th degree attributed to him on the company website.  HE claimed  a BS from Minnesota St Cloud State University, another minor league school quite frankly.  Donnelley did not resign bu issued a statement taking "full responsibility" for the regrettable situation.  He made $4.5 M in 2005 and the stock is up 85% while he has been CEO.

Well Radio Shack was not doing so well when the truth came out about Edmondson, while apparently Donnelley is in good shape.  But the R/S Board issued a statement that it was a matter of ethics and integrity, apparently the Donnelley Board did not feel the same way.  Now thought questions.

What does it mean that Swanson ‘takes responsibility’ I mean he is the one who perpetrated the lie, how does ‘responsibility make it any less of a lie?

What do you think of someone who does this and then shrugs it off as, regrettable, or like Swanson, initially blamed outside contract publicists?  If they lie about their degree knowing it to be a lie, where does their line of ‘thou shalt not go’ stop and start? Is there such a line in this person’s life?

I teach the Accounting Ethics class or did at A & M San Antonio.  We discuss such topics in the class. You will note I have made an effort to include ethics cases in the cost and intermed and statement analysis course as well.

Which Board showed the better judgment?  Do such transgressions matter? Do you think it matters to shareholders? Should it?  What standard is each Board broadcasting for the employees?  Would Swanson put up with an employee who lied to him on his or her resume? I wonder….

DLE