A longtime partner with Arthur Andersen, Berardino became CEO of Andersen
Worldwide in January 2001 and stepped down in March 2002 after the firm was
indicted for obstruction of justice in the Enron investigation. He tells
FRONTLINE that he believes the accounting profession is misunderstood by the
general public, and that a new conceptual framework is needed if auditors are
to communciate more effectively with investors. He answers questions about
Andersen's conduct as Enron's auditor, and he speaks about the issues
surrounding Andersen's role as both auditor and consultant; about the decision
to invite Paul Volcker, the former Federal Reserve chairman, to head an
oversight panel in an attempt to restructure Andersen as an audit-only firm;
and about the timing of his own decision to step down.
Chairman of the SEC from 1993 to 2000, Levitt says the Enron scandal is
"symptomatic of a breakdown of the ethical values of business over a period of
perhaps 20 years." He is very critical of what he calls "accounting
hocus-pocus" or how companies have become more creative in their
interpretations of accounting standards. In this interview, he describes the
political heat he took during the three big accounting battles of the 1990s, and
calls for an independent agency with subpoena power to oversee the accounting
Sen. Joe Lieberman (D-Conn.) is chairman of the Senate Governmental Affairs
Committee that has been holding hearings on the collapse of Enron. In 1994, he
fought against the Financial Accounting Standards Board's proposal that
companies estimate the value of employee stock options and list them on their
balance sheets. Lieberman sponsored a resolution, passed by a Senate vote of 88-to-9, that recommended FASB leave the standard unchanged. He tells FRONTLINE
that the expansion of stock options during the past two decades is one of the
ways in which capitalism has been democratized in the U.S.
Chairman of the Securities and Exchange Commission since August 2001, Pitt is a
prominent lawyer who has represented Wall Street firms and the accounting
industry. In this interview, he explains the reforms that the SEC is proposing
under his leadership, including a Public Accountability Board with
oversight authority over accounting firms. He also speaks to several issues
that were at the center of political battles during the 1990s: the expensing of
stock options, the tort-reform law of 1995, and the effort by his predecessor
at the SEC, Arthur Levitt, to separate accounting firms' auditing and consulting practices.
The executive director of the Council of Institutional Investors, an
organization of large pension funds, Teslik says that Enron is a result of the
deliberate erosion of securities laws intended to protect investors. Teslik
tells FRONTLINE, "Every safety net designed to protect investors failed
completely with Enron."
Turner was the chief accountant of the SEC from 1998 to 2001. Before that he
served as CFO for Symbios Inc., an international manufacturer of semiconductors
and storage solution products, and was a partner at Coopers & Lybrand (now
PricewaterhouseCoopers). He is currently a professor of accounting at Colorado
State University. In this interview, Turner describes how the mindset of the
accounting industry has evolved from looking out for investors to looking out
for business. He estimates that corporate restatements over the past six or
seven years will cost investors over $200 billion.
Chairman of the Federal Reserve Board from 1979 to 1987, and current chairman
of the oversight committee for the International Accounting Standards Board,
Volcker was invited by Arthur Andersen, in the wake of the Enron scandal, to lead
an oversight panel in an attempt to restructure Andersen as an audit-only firm.
His efforts proved futile when it became clear that Andersen and the government
would not reach a settlement and that Andersen would go to trial on charges of
obstructing justice. Volker talks about the crisis he believes the accounting
profession faces today, and about what is at stake for America's markets.
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