The following is from the December 24, 2010, edition of The New York Times. Wayne Shaw, a professor of corporate governance at SMU's Cox School of Business, provided expertise for this story.
January 4, 2011
AUSTIN, Texas (AP) — To many in the accounting world, Carl Bass is a hero. Long before Enron became a worldwide symbol of scandal, Bass told his supervisors at Arthur Andersen LLP that something was amiss with the Houston energy giant.
But the Texas state board that licenses accountants sees Bass differently — as unfit to continue in his profession.
Nearly a decade after Enron collapsed and took Arthur Andersen with it, the work of Bass and another former Andersen partner, Thomas Bauer, as Enron auditors is still being debated in a highly contentious and costly proceeding.
The Texas State Board of Public Accountancy has stripped Bass and Bauer of their CPA licenses after determining they violated professional standards in their audits. But the pair has pushed back with a legal challenge that led a judge to rule that the license revocations should be voided because the board violated the Texas Open Meetings Act. . .
Wayne Shaw, a professor of corporate governance at SMU's Cox School of Business in Dallas, said it's unusual to see licenses revoked over flawed audits unless the accountants were complicit or showed total disregard for accepted procedures. That's particularly true for audits like those involved with Enron, he said.
"I don't think people comprehend how complex Enron was, the mathematics behind some of these transactions," Shaw said.
Read the full story.
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