Save the applause for ethical CFOs. (Letters to the Editor).I am writing in response to your "From the Editor" piece in the May 2003 Financial Executive. I am not usually much of a letter writer, but the opinions you expressed in the second half of your article affected me so strongly that I felt that I must respond. To be candid, I cannot believe that you find it heartwarming heart·warm·ing or heart-warm·ing adj. 1. Causing gladness and pleasure. 2. Eliciting sympathy and tender feelings: a heartwarming tale. Adj. 1. that two admittedly guilty CFOs at HealthSouth have come forward admitting wrong. We should be shaking our heads in disgust over yet another story of large-scale financial impropriety. These guys are just as guilty as Andrew Fastow Andrew Stuart Fastow (born 22 December 1961) was the chief financial officer of Enron Corporation until the U.S. Securities and Exchange Commission opened an investigation into his conduct in 2001. , the Al Dunlap gang at Sunbeam and the numerous other CFOs at once-reputable companies who have fraudulently misrepresented the financial performance and condition of their companies. The only difference that I can discern between Messrs. Smith and Owens at HealthSouth and the numerous other perpetrators in this circus is the fact that they chose to come clean relatively early in the process. The stories that should be heartwarming to you, and the CFOs that we should collectively applaud, should be those about CFOs who took the ethical high road initially and "just said no" to pressures from the CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. to inflate earnings. There are certainly many stories of individuals who have done the right thing all along and have taken heat for not caving in. There probably are even some FEI FEI Fédération Équestre Internationale. members in transition" as a result of their decision to do the right thing. Our profession is truly at a critical juncture. Celebrating the fact that two guilty CFOs have decided to confess their sins before they were caught will not do anything to restore our credibility; in fact, it may damage it even more. The actions of the HealthSouth CFOs make them virtually indistinguishable from their counterparts at Enron, WorldCom, Sunbeam or Adelphia [Communications]. I understand, I think, what you were applauding, but I still think you have missed the larger point. I do agree with your statement that the investing public is better off now that someone came forward, but I really believe it is a big mistake to put these guys on a pedestal On a Pedestal is an EP by the Swedish band Adhesive, released in 1998. Track listing
A fraudulent activity done by some corporations to falsify their financial statements. Notes: Cookie jar accounting is a great example of cooking the books. probably comes from the CEO in most cases, but not all. Let's not Let's Not is a science fiction short story by Isaac Asimov. It was first published in Boston University Graduate Journal in December 1954. It was written for no payment as a favour to the journal, and later appeared in the collection Buy Jupiter. try to paint our profession as a victim by blaming either the CEO or the greed of the audit firm. It would help restore our profession's credibility to admit that we have been weak in upholding our professional integrity. Regardless of whether we were under pressure or whether the auditors were willing to be lenient, the buck has to stop with us. To think otherwise is like blaming Monica Lewinsky Monica Samille Lewinsky (born July 23, 1973) is an American woman with whom the former United States President Bill Clinton admitted (after initially denying) to having had an "inappropriate relationship"[1] while Lewinsky worked at the White House in 1995 and 1996. for former President Clinton's troubles. It's true that CEOs should not pressure their CFO See Chief Financial Officer. to falsify falsify, v to forge; to give a false appearance to anything, as to falsify a record. financial records. But the more important, even critical message, is that CFOs should never sign off on fraudulent financials regardless of the circumstances. At the end of the day, there's probably not a CFO out there who has not been pressured at some point in his or her career. How we respond to the pressure is what defines our character, our integrity, and our ethics. Finally, let's keep this matter in perspective. A very small percentage has damaged the reputation of a once proud profession. It's up to us, as the leaders in our profession, to restore our credibility. What we do will speak much more loudly than what we say. Joseph W. Harwell (Nashville Chapter) Vice President-Finance & CFO Manchester Tank & Equipment Co. Brentwood, Tenn. FEI President & CEO Colleen col·leen n. An Irish girl. [Irish Gaelic cailín, diminutive of caile, girl, from Old Irish. A. Sayther replies: Mr. Harwell, Thank you for your passionate response to the "From the Editor" column. While I don't think that it was (Editor-in-Chief) Jeff Marshall's intent-- his intent was to focus on the equally bad behavior of the CEO -- I wholeheartedly whole·heart·ed adj. Marked by unconditional commitment, unstinting devotion, or unreserved enthusiasm: wholehearted approval. whole agree that we should not appear to be applauding the behavior of a few CFOs who didn't have the backbone to stand up to their CEO. FEI continues to be committed to ethical leadership and taking the "high road." No one is more committed to that than I am. I would like to applaud your passion, and have reemphasized FEL's commitment to ethics in my President's letter this month. Best regards, Colleen A. Sayther President & CEO Financial Executives International |
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