A valuable Reminder. (From The CEO).

We lived a lie. In the 1990s--in the financial markets and corporate governance--we lived a lie. We knew that many companies were overvalued, that their stock prices were improbable, and that we were making too much money in our retirement and other accounts. We knew that many of the Silicon Valley successes were impossible, so we called them a miracle (and so it would have been, had it been true). It wasn't only CPAs who knew these things--virtually everybody in the country knew them.

We hoped the economy wouldn't hit a wall quite as hard as it did--that maybe we could slide to a soft landing and keep most of the gains we earned. That didn't happen.

VALUES LOST

Some CPAs went along for this ride, proving that CPAs are as human as the rest of us. The '90s were a decade in which the country lost its values. We knew that measuring virtue in dollars was wrong. We knew it wasn't possible to become so rich so fast. We knew that we shouldn't be leaving so many of our fellows behind economically. But we tried to kid ourselves about these things. And now the day of reckoning has come.

GRAPPLING WITH PARADOX

The main issues that I grapple with are those that affect the public's confidence in the accounting profession. With the Enron bankruptcy, the indictment and subsequent conviction of Andersen, and the other corporate scandals and restatements, we have much to do.

We have learned how much the public trusted and relied upon CPAs to protect them from a group that they never trusted--corporate CEOs. The real shock to the public has been finding out that CPAs aren't able to catch everything, tell everything and stop everything that's bad from happening.

This relates to a paradox in American thinking--many believe that the very foundation of our government is based on the notion that governments rule by the consent of the governed and that the government that governs least governs best. At the same time, when we feel damaged, hurt or threatened we say, "There ought to be a law."

Since Sept. 11, 2001, and the Enron and other corporate failures and scandals that followed so quickly on the heels of the terrorist attacks, we have been in a "There ought to be a law" phase.

LOOKING FORWARD

During the coming year, we will face the implementation of Sarbanes-Oxley, recently passed California legislation, new SEC and FASB-issued standards and a host of new regulations from the California Board of Accountancy. We also will feel the impact of the AICPAs loss of self-regulatory authority. We may see nongovernmental responses to the skepticism about our corporate integrity, financial markets and financial reporting systems.

These have been, and will be, communicated to you regularly through California CPA and other CalCPA communications such as BUZZ and chapter bulletins. So I'm not going to summarize or conjecture on what the challenges may be. Instead, I'm going to make a simple request of each CPA in California.

LET YOUR VALUES GUIDE YOU

Reflect on the values of the CPA profession that motivated you to become a CPA in the first place. Remember your heroes, your training and your mother's admonitions. Be sure that those are the values that guide your actions as you work each day with your clients, employers or students.

Talk about the profession's values; make opportunities to talk about the profession; and celebrate opportunities that reflect positively on the profession. Remember, by your actions you will be judged, and by your actions the entire profession will be judged.

Finally, never, never, never refer to the accounting profession as a trade or industry, and do not let others do so either. You are not bookkeepers. You are professionals who have mastered a discrete body of knowledge, who adhere to a code of ethics, who apply standards of excellence to your work and who support the public welfare.

Your core values of integrity, independence, objectivity, competence, lifelong learning and service to your clients or employers should make you proud.

Show it.

Susan B. Waters, CAE, is CalCPA's CEO. You can reach her at [e-mail] or [phone].