Duped once, media resolves to increase scrutiny of companies.

LIKE the investors who watched their savings reduced to ash, many business journalists were caught off guard by the scope and nature of the financial scandals of the past two years.

Relied upon for knowledgeable reporting and analysis of the companies that readers invest in and work for, the business press largely failed to deliver--at times neglecting to look under the surface and occasionally serving as unwitting public relations dupes for companies they should have been scrutinizing.

The result, at least in some quarters of the business media, has been a period of introspection and self-flagellation, followed by earnest vows to do a better job. To be sure, a handful of journalists have seen their careers enhanced by awards and book deals stemming from scandal coverage, but the business press has come to look at its coverage of Enron Corp. and others as less than stellar.

The question is whether anything has changed since the Enron affair opened the scandal floodgates in the fall of 2001.

The answer, it seems, depends on whom you ask.

"Nobody wants to be the one who writes a glowing story about company X two weeks before they go bankrupt," said Robert Bryce, the author of "Pipe Dreams: Greed, Ego and the Death of Enron" (Public Affairs).

"A lot of media outlets were embarrassed," he said. "They are becoming less put off about looking at SEC filings and the key metrics that are the essentials of business reporting."

Bryce believes that the inability of the business press to sniff out corporate scandals has much to do with the dot-com heyday of the late 1990s when "everyone had a great story to tell" and news outlets became lazy about exercising due diligence.

Still, with editors and reporters alike boning up on their understanding of balance sheets and generally taking a more critical approach towards the companies they cover, he said things are improving.

Training remains lax

Not everyone agrees.

James Gentry, dean of the School of Journalism and Mass Communications at the University of Kansas and former executive director of the Society of American Business Editors and Writers, said most news organizations, are not taking concrete steps to improve their business reporting.

"In some markets there has been heightened interest in and commitment to improving the analytical and reportorial skills of business reporters, but those markets are the exception, not the rule," Gentry said in an e-mail. "News organizations are at or near the bottom of the list in terms of the percentage of revenues they spend on training. It's hard to improve the quality of the product if you don't invest in training."

A series of programs for business journalists sponsored by the American Press Institute to be launched in the coming months will help, he believes, but it still comes down to media companies making the commitment to train and hire qualified individuals.

Jonathan Lansner, business columnist for the Orange County Register and secretary/treasurer of SABEW, said that organization has held sessions over the past two years on subjects from basic finance to investigative reporting.

"Our experience level was probably not there, and we certainly got caught up in the hype," Lansner said of business journalists. "There's no doubt that we need more education--but so does the average investor and even the average broker."

Bruce Willison, dean of the Anderson School at UCLA and chairman of the school's Gerald Loeb Awards for distinguished business and financial journalism, said quality financial reporting has become more important.

"There is a better understanding of how economic conditions affect our daily lives and there is more of a need than ever for thorough and insightful reporting," Willison said.

While acknowledging failings, Lansner believes the inability of journalists to figure out what was going on inside Enron, MCI (formerly WorldCom Inc.), Global Crossing Ltd. and others was not surprising given the skill of the executives in keeping questionable dealings off the books and away from public scrutiny.

But a few had suspicions, or at least questioned how the energy giant was generating such tremendous revenue and profits.

For journalists who did raise questions about companies like Enron, the revelations of corporate misdeeds proved a nice career boost.

From Wall Street Journal reporters Rebecca Smith and John R. Emshwiller, who contributed to that paper's Pulitzer Prize-winning Enron coverage, to pundit-cum-gubernatorial-candidate Arianna Huffington, more than two-dozen books have been published about the Enron affair. More than a third of the finalists for Loeb Awards last year were stories about financial scandals, Willison said.

The interest in such stories, Bryce said, will have the effect of emboldening a news media that is often gun shy due to general complaints from corporate America and the public about negative press coverage.

"Clearly reporters and columnists are being much more skeptical top to bottom than they were three years ago," Bryce said. "It's a lot safer now to be the skeptic than the cheerleader."