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Corporate finance in the land of oz. (From Where I Sit).

You don't have to be a Wall Street junkie to know that not too long ago, a string of dynamite was lit at Enron headquarters in Houston -- and is still going off throughout corporate America. Every time the dust settles from one explosion, a new fuse gets lit, igniting a fresh storm of controversy and turning a market capitalization into rubble. Blamed for holding the match in this ongoing affair is a little-known radical group that goes by the name of "corporate finance professional," for which I must confess to being a member.

One of the minor inconveniences I've experienced throughout my career is explaining to those outside my profession what it is I do. After graduating with an accounting degree, passing the CPA exam and receiving my master's degree in finance, the most common misperception that I've routinely tried to correct was that most of my time was spent working on tax returns and that, as a tax expert, I was capable and willing to give advice on personal tax matters.

As my career progressed into management positions, those around me outside the corporate world began to understand that my working time was probably spent in ways they would never really understand, so the questions have become more shallow and less probing. I've also taken to using occasional analogies to bring what I do into clearer focus, borrowing from terms and events that are more easily recognized. This really comes in handy when news events exposing snippets of insight into my world -- like the Enron situation -- reach the more curious around me and I'm called upon to help make sense of them.

However, far from being a minor disturbance in "the force," Enron has ripped a gaping hole, exposing a whole new breed of alien creatures previously unknown to the uninitiated. I've found myself searching lately for the right analogy to help put things in order for my various constituencies.

I've started and stopped this effort a few times, selecting -- then rejecting -- choices that seemingly fit, but each time finding fault upon further reflection. My first choice of Enronesque analogy was "Gone With The Wind." I found the title and war setting very apropos, but just couldn't make a strong enough linkage to the love theme to make it stick. Another early favorite was "West Side Story," where there's an uncanny resemblance between gang life and the culture perpetuated by Enron, once THE icon for Western capitalism. But all of the singing and dancing has too much of a festival flavor to suit my tastes.

The right analogy at this time is one that seems to work as well with my mother and my kids as with my neighbors. Here's how I explain the current situation to them: It's as if I went to sleep and woke up in the middle of a tornado, spinning round and round and dropping me in a strange new place. Everything is different, but also somehow familiar, As I try to find my way back, I'm joined by others, also looking for something.

One of those is an auditor, who seems to have lost his courage to speak up when he hears something that doesn't make sense. Another is an audit committee member, who doesn't seem to understand the complicated structures he and his associates have been approving. The SEC and Congress have joined in, too, and they've got no heart to show any compassion or sympathy. Finally, we reach the Emerald City (Wall Street, of course). And what is the analyst doing? He's huffing and puffing and putting on a big show, but he's not being honest. He should be ashamed!

Each step along the way, we've been confronted by the wicked one, Enron. Try though as we may, we just can't escape. Everything we see and read has been tainted by these bad acts. I wish I could find my way home, back to the comfortable and familiar. I keep clicking my heels, but it just doesn't help. Kansas, it seems, no longer exists.

Mark W. Joslin is Vice President and Corporate Controller for Eastman Chemical Co. This is adapted from remarks he made at Chemical Week's seventh annual Senior Financial Officer Meeting. He can be reached at
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Author:Joslin, Mark W.
Publication:Financial Executive
Article Type:Brief Article
Geographic Code:1USA
Date:Sep 1, 2002
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