Enronitis—Not!

Accounting used to be such a drab, plain-Jane profession.

That’s why Hollywood depicts the lives of lawyers rather than accountants.

Perhaps the scandal that has rocked Andersen, the once-respected

Big Five accounting firm (formerly known as Arthur Andersen & Co.), will

change all that. Andersen accountants have been accused of some pretty exciting

stuff: helping executives of Enron, the huge Texas energy trading company, cook

its books and fleece its stockholders. Even so—and fortunately—the Enron

scandal is not expected to make waves for Southwest Florida accountants.

“We’ve had a lot of questions from clients,” says Nancy

Reynolds of Reynolds & Associates CPAs in Naples. Because Enron is a

publicly traded company governed by rules established by the federal Securities

and Exchange Commission, however, and because most local accounting firms work

with closely held firms, Reynolds predicts little local fallout from the

scandal.

One possible issue: separation of audit and nonaudit

services. In addition to performing audits, many local accountants serve as

consultants in areas from computer systems to efficient operations. When an

accounting firm provides both kinds of services to the same client, it could

face charges of a conflict of interest. But Reynolds says she believes local

companies adhere to professional and legal standards. Requiring that audit and

nonaudit functions be allocated to separate accountants would increase costs

for many businesses without providing much payback in ethics, she contends.

“We’re already pretty heavily regulated, like banks are, and

changing statutes to me doesn’t seem to be the answer,” she says. “You can’t

regulate people to be honest. It doesn’t appear that the CPA firm or the people

at Enron were honest. How can you regulate that?”

The Enron scandal will primarily affect Big Five and other

national accounting firms that do most of the work for publicly traded

companies, says David Schultz, a partner in Schultz, Chaipel & Co. in Fort

Myers. Few such public companies have headquarters in Southwest Florida.

The scandal could free up employees for companies suffering

from a national and local shortage of CPAs, notes Schultz. “But quite

truthfully, I’d think that most of the benefits of any attrition out of

Arthur’s ranks will be to the other Big Five firms,” he says.

Andersen, based in Chicago, has no offices locally but does

have outposts in Miami and Tampa. Harvey Kapnick, who served as chairman of

Andersen from 1970-1979, lives in Naples and is active in social and civic

affairs here but did not return phone calls seeking comment.

—Daniel Lindley