Critical Perspectives on Accounting 15 (2004) 995–1001

You reap what you sow: the ethical

discourse of professional accounting夽
Paul F. Williams∗
Department of Accounting, North Carolina State University, Box 8113, Raleigh, NC 27695, USA

Received 30 August 2002; received in revised form 10 March 2003; accepted 15 April 2003

Abstract

In this essay I argue that some of the responsibility for the recent accounting scandals (e.g., Enron,
Andersen) lies with scholars and teachers of accounting. Utilizing the theory of shared professional
responsibility developed by Larry May (1992), I argue that the accounting academy’s search for
scientific respectability has had the consequence of destroying our ability as a discipline to have
the shared values required to prevent Enron’s and Andersen’s from occurring. The ascendance of
Positive Economic Science as the monolithic paradigm of accounting scholarship has deprived us of
any coherent ethical discourses with which to make judgements about the “propriety” of professional
behavior. Constructing such a discourse is now a primary responsibility of the academy.
© 2004 Elsevier Ltd. All rights reserved.

Keywords: Accounting ethics; Professionalism; Enron; Andersen

The Enron/Andersen affair continues to produce endless analysis and punditry. We now
observe half-hearted attempts to “fix” the institutional structure of financial reporting in
order to prevent similar events from occurring in the future. As an accounting educator and
rapidly aging, yet still aspiring, scholar skeptical of the technical abilities accountants pro-
claim to have, I believe it is to misunderstand seriously the events of Enron’s and Andersen’s
demises as simply a technical failure susceptible to a technical fix. We must also acknowl-
edge what Enron/Andersen may have to teach us accountants about what we hold as our
human values and about how we educate ourselves. Enron/Andersen is a moral problem

夽 This brief essay is based on remarks presented at a panel session on Enron at the Critical Perspectives on
Accounting Conference, April 26, 2002. A highly abridged version of those remarks was published as an editorial
in Williams (2002c).
∗ Tel.: +1-919-515-4436; fax: +1-919-515-4446.

E-mail address: paul williams@ncsu.edu (P.F. Williams).

1045-2354/$ – see front matter © 2004 Elsevier Ltd. All rights reserved.
doi:10.1016/j.cpa.2003.04.003
996 P.F. Williams / Critical Perspectives on Accounting 15 (2004) 995–1001

and denying this is to seriously miss whatever point it may have. It is my intent in this brief
essay to sketch out the moral significance of Enron/Andersen and to speculate upon how
the accounting academy may be implicated in these events. The remainder of this essay is
divided, roughly, into three sections. The next section is a brief account of the transforma-
tion of accounting discourse that began when accounting became an autonomous discipline
within the academy and the implications of that transformation for how we understand and
teach accounting in the academy. The following part will briefly develop the idea of shared
responsibility and agency and what the implications are for our collective behavior. The
final part is a brief conclusion.

1. The discursive change of academic accounting

In the 1960s the academy where accounting is taught was transformed by its colonization
with Positive Economic Science (PES; Williams, 2002a). This was spurred by the desire to
make accounting more scientific (Zeff, 1966). This push for scientific rigor was accompanied
by the creation of the Journal of Accounting Research and the aggressiveness with which the
doctrines of PES were imposed on the unsophisticated teachers and practitioners who were
unaware that they were sorely mistaken about what they understood accounting to be.1 Like
missionaries filled with the spirit, the goal was to convert the heathens and convert they did by
expelling from all texts any but the “official language” in the name of increasing accounting’s
scientific rigor. However, for accounting it is ersatz rigor (Reiter and Williams, 2002).
Accountants seem not to understand that the real accomplishment of PES or neo-classical
economics is not a scientific one (see, e.g., Fleetwood, 2002; Redman, 1991; Rosenberg,
1992). Instead, it is to have articulated as an axiomatic, Newtonian-like system of equations
the social system of capitalism—the creation of a political geometry (Rosenberg, 1992).
Economics has succeeded in creating an imaginary social world described by a system
of mathematical equations which allegedly explain the well-ordered behavior of humans
pursuing exclusively their own, narrowly understood, self-interests to the optimal benefit
of all. PES is a moral and political discourse that leverages the logical rigor of mathematics
to justify this imaginary social world as the only logical social order and give its implicit
moral premises the appearance of natural law (Wolfe, 1989).
A serious consequence of this modern accounting discourse has been the transforma-
tion in the academy of the accounting function from an essentially moral or legal one to a
purely technical one, which has no robust technical foundations. A vivid demonstration of
this transformation is provided by one of the academy’s leading figures, Professor William
Kinney in his 2000 Presidential Lecture at the American Accounting Association meet-
ing in Philadelphia. He identified accounting academics’ core competency: “I believe that
choice of a standardized (one size fits all) measurement structure and understanding of that
choice is central to accounting scholarship (Kinney, 2001, p. 275).” In this view account-
ing scholarship, and thus eventually the content of accounting education, is modeled as a

1 Abbott (2001, p. 151) notes the growing use of the rational decision model approach to human behavior in

many other social sciences besides economics. He likens this to the one-eyed man phenomenon, i.e., in the land
of the blind, the one-eyed man is king.
 P.F. Williams / Critical Perspectives on Accounting 15 (2004) 995–1001 997

straightforward rational economic choice problem, which is purely technical in nature, i.e.,
economic measurement. Under the influence of PES, Professor Kinney enunciates some
implications:

First, accounting estimates, risk assessments, and judgements are more important today
than they were in 1960. Accountants are providing these estimates and assessments, yet
we know relatively little about how best to estimate uncertain amounts and how best to
measure and report risk of adverse future events. Furthermore, many universities do not
provide adequate training that allows students to develop these professional judgement
and decision-making skills (ibid., p. 281).

Elsewhere, I have paraphrased this statement as, “. . . we conclude that accountants are
apparently already doing what they don’t yet know how to do, and universities are at fault
for providing inadequate training in what we as yet don’t know how to do (Williams, 2002a,
p. 12).”
This kind of incoherence to accounting discourse provided to us by PES increasingly has
been the content of accounting education for the past 20 years. Today we have principles of
accounting texts that contain no information about debits and credits, no explanations as to
why a system of gathering merely “information” is constructed in so grossly an inefficient
way. For example, if I want to know how much cash to report on the balance sheet, I need
only count it. I record every cash transaction for an entirely different reason, which goes
largely unstated in all but the auditing course. We spend more and more of our class time
computing and discussing the significance of ratios and “analysis tools” that apparently
were not of much help to analysts who recommended buying Enron stock right up the day
it filed for bankruptcy.
The PES model of social relationships and its assumptions about human nature are now
what are almost exclusively taught in our classrooms as the model of human political and
moral affairs. It is little wonder then that entrepreneurial accountants calculate what they
can get away with since that is what we humans are by our very nature. Andersen’s troubles
are not because it is any different than the other four; it simply had the misfortune of having
a client whose shenanigans were so complex and rapaciously ambitious that its calculation
was beyond Andersen’s ken. Our “new economy” also contains new avenues for sin, which
the large public service firms have apparently yet to appreciate fully.
The bizarre nature of our accounting version of economist discourse is further illustrated
by commentaries provided by the two most recent AAA presidents. As Andersen began to
sink, President Joel Demski noted that, “Our recent notoriety, though surely unwelcome,
also provides opportunity and challenge (Demski, 2002, p. 1).” What sort of challenge
might it be? He elaborates:

The question is whether our role as accounting scholars is enhanced if we become better
adept at treating ‘transactions’ as endogenous. Ask yourself: is the use of Special Purpose
Enterprises independent of disclosure rules more broadly (sic) and organization struc-
ture; what about financial instruments? for that matter, are ‘transactions’ engineered in
anticipation of changes in reporting requirements? Then ask yourself: does the fact the
firm decides to behave in this fashion help you identify the measurement and disclosure
issues that are associated with the resulting ‘transactions’ (ibid.)?
998 P.F. Williams / Critical Perspectives on Accounting 15 (2004) 995–1001

Further he notes:
Consider the broad topic of earnings management. Drawing the circle narrowly around
the subject, we tend to proceed with the presumption such behavior exists and focus on
its documentation. Yet a broader approach would treat the behavior as endogenous and
focus on the web of institutional and organizational arrangements that precede any ability
to detect that behavior (ibid.).
Note that accountants’ notoriety is characterized as simply posing technical problems for
which empirical research within the structure of PES will provide solutions, even though
in the 35 years we have been doing this it has yet to do so.
In spite of PES dismal performance as a model of empirical science for accounting, its
power over the academy seems unaffected. In Peter Wilson’s fall 2002 President’s Message
(Wilson, 2002), he discusses the issue of restoring public trust in the accounting profession.
With respect to the role of accounting scholarship he praises the current condition of our
academic knowledge:
By robust, I mean that our best structures explain a broad array of phenomena and, in
particular, they are largely invariant to change. . . . Recent events will pressure test our
theories and empirical results, and while a few cracks are likely to surface, I suspect that
those results that we cherish most will continue to hold (ibid., p. 1).
Unnoticed is the fact that our cherished theories and empirical results gave us no insights
sufficient to prevent us from experiencing a three and one-half trillion dollars drop in the
market value of share capital. Suggesting that recent events comprise a form of powerful
evidence that our current theories and empirical results are not at all robust seems to be ver-
boten. How do we restore public trust through research? The President’s Message contains
the following suggestion:
For example, I suspect that there is enormous cross-sectional variation in variables asso-
ciated with earnings quality during 1998–2000 relative to prior years. We are well aware
of the extreme cases of aggressive accounting that have been widely reported in the
media, but surely there was considerable cross-sectional variation among the more than
10,000 SEC registrants with regards to opportunities and motives to manipulate reported
numbers, and our extant paradigms (emphasis added) several factors that likely explain
this variation (ibid., p. 1).
Our extant paradigms are those we have confiscated from PES and their inability to permit
us to have avoided the necessity of having to restore public trust in accounting ought to
give us pause as to how good they really are. We see from Peter Wilson’s message that our
response as scholars is to continue in the futile effort to empirically demonstrate that the
imaginary world of our extant paradigms is real.
What is notable about the observations made by these prominent leaders of the Academy
is that they made no acknowledgement that anyone did anything that might be construed
as morally wrong. That is because the discourse of accounting (the extant paradigms) in
the houses of higher learning where accountants are being taught, have eradicated from its
vocabulary any language capable of allowing us to discuss whether what happened with
Andersen was behavior that might be construed as morally wrong. Our ability to understand
 P.F. Williams / Critical Perspectives on Accounting 15 (2004) 995–1001 999

these events is limited to, for example, a simple, but reassuring, rotten apple theory and we
are incapable of considering, e.g., a rotten barrel theory (Williams, 1987, 2000, 2002b;
Shearer, 2002). Andersen could be economically stupid, its reputation is its product and it
damaged that, but it could never be concluded that what Andersen did might be immoral.
Within the discourse of PES nothing bad can ever happen. All behaviors are merely a matter
of individual expected value (however determined) maximization. Within the discourse of
PES even the D.C. snipers can not be reproached for what they did. Indeed, they may
have gotten exactly what they wanted and were thus acting in the most impeccably rational
way.

2. Sharing responsibility for Enron/Andersen

A professional, which most accountants likely believe describes them, acquires his or
her status as a professional only by being a member of a group. Only as a member of a
group that publicly judges the quality of service being performed by an individual can that
individual be a professional (May, 1992, p. 100). The important implication of this group
nature of professional status that is relevant to this essay is that we in the academy must
accept responsibility for Enron/Andersen events by virtue of how we have impoverished
the discourse of accounting. I assert this as a proposition relying on an argument developed
by the philosopher Larry May, which I will only cryptically render in this brief essay.
May’s argument is certainly controversial; I do not propose to assert, as Wilson and Dem-
ski do of theirs, that it is paradigmatic or “explains” anything (or, in their view, everything).
I sketch it out merely as a possible alternative set of premises within which to think about
the responsibilities of accounting academics. A central thesis of May’s argument is that
people who share certain attitudes also share responsibility for the harm caused by those at-
titudes (ibid., p. 5). Such people contribute to fostering a climate in which harmful attitudes
may persist and even prosper. For example, May regards racist attitudes as an example. If
one harbors racist attitudes, even though the person may not engage directly in harming
individuals against which such attitudes are directed, the person is still partly responsible
since his or her racist attitudes contribute to a climate of racism in which harm can be done.
A second thesis of May’s argument is that people’s attitudes are shaped by their group
memberships. This is not by virtue of groups having values and attitudes, which they impose
on people, but by providing the structure of formal and informal relationships through which
group members influence the values of other members (ibid., p. 75). A business corporation
is a classic example of how a group can influence the behavior of its members. As May
notes, “Any explicit policy that sounds like a general principle of behavior can take on the
status of a moral principle in especially large structures where there is no single person
who assumes moral leadership of the group of members (ibid., p. 77).” So, for example,
maximizing profit can easily become a moral value since its status is action guiding just as
a moral principle would be (ibid.). When economic man is used as the framework for our
textbooks, the context for our theories, and the matter-of-fact description of how people
behave, it is seldom prefaced with the disclaimer that it is merely an imaginary construct
that allows for the doing of our mathematics. We run the grave risk that it is communicated
as a moral value.
1000 P.F. Williams / Critical Perspectives on Accounting 15 (2004) 995–1001

The role of groups in effecting peoples’ values leads to an expanded notion of what
moral agency means. According to May the notion of agency expands “. . . to include those
attitudes and dispositions that make overt behavior, even the behavior of others, more likely
to occur (ibid., p. 52).” The critical nature of this expanded view of agency devolves from
the observation that:
In advanced technological societies, much greater evil is done by groups of persons than
by discrete individual persons. And evil is made much more likely when people do not
understand how failure to change their attitudes or behaviors facilitates the production
of harm within the groups of which they are members (ibid., p. 53).
Since professionals are expected to perform their social functions in such a way as to
cause minimal harm (the first principle of medicine), every member of a profession must
be sensitive to the potential harms that might result from the group adopting certain values
and attitudes. If one chooses to be a member of a profession, one has made a very public
declaration about just who it is one has chosen to be. One is morally responsible for such a
choice and if one chooses to be an accountant and accountants subscribe to values that lead
to great harms, then every accountant (especially those who teach it to others) is morally
accountable for that harm.
A critical implication of the shared nature of professional responsibility is that “All
professionals have the positive duty to be especially vigilant in critically evaluating the
possible harms that their work can cause (ibid., p. 137).” But in order to be able to critically
evaluate the harms their work can cause they must be equipped with a discourse within
which such evaluations can occur. The accounting academy is responsible for creating
for accounting a discourse so conceptually impoverished (Shearer, 2002) that such critical
evaluation is nearly impossible. Unlike the three monkeys, accounting academics no longer
can see evil or hear evil because they have no capacity to speak of evil.

3. Conclusion

This brief commentary on the circumstances of the Enron/Andersen affair leads to a

rather ordinary conclusion. That is that members of the academy must be concerned with
other than their politically correct academic reputations. We in the academy must accept
some of the responsibility for the instances of corporate corruption that continue to reveal
themselves. Depriving ourselves of an ability to discuss the morality of what we do in
exchange for the illusion that we are engaging in some kind of worthy scientific endeavor
has all of the earmarks of a Faustian bargain.
A commentary on the Enron affair made by Avital Ronell, a professor of comparative
literature at New York University, whose latest book, entitled Stupidity, is particularly
compelling. In a brief column in the Chronicle Review he made the following observation
about the Enron affair:
The Enron fiasco has given stupidity a bad name (emphasis in original). Kenneth Lay is,
in effect, simulating stupidity, in order to capitalize on stupidity’s traditional association
with innocence. Lay is repeating something of the Kantian gesture that I try to work out in
 P.F. Williams / Critical Perspectives on Accounting 15 (2004) 995–1001 1001

my book: “I was too stupid to have acted in a criminal manner.” It is an utter exploitation
of stupidity as a protective device.
There’s something about capitalism that just got exposed. So what the Enron executives
did was not a mistake necessarily, nor is it stupid. It’s cruel (emphasis added). One can
say mean and stupid, but one cannot say cruel and stupid, because cruelty implies some
sovereignty (Ronell, 2002, p. B4).
People in their late middle age who worked for this company for many years lost their
jobs and their retirements. What can the profession of accounting say to them other than,
“So sue Andersen?” Do any of us feel any guilt or shame about what we have helped do to
so many people? What do we as allegedly learned professionals say to those people? Was
what Andersen did cruel? Currently, we are struck dumb by our lack of discursive ability
to seriously discuss such questions. Certainly it seems reasonable now that accounting
academics and practitioners should be asking themselves where did the Enron/Andersen
protagonists learn to behave that way?

References

Abbott A. Chaos of disciplines. Chicago, IL: The University of Chicago Press; 2001.
Demski J. Presidents message. Acc Educ News 2002;(Spring):1.
Fleetwood S. Why neoclassical economics explains nothing at all. Post-Autistic Econ Rev 2002;(17) [article 2].
Kinney WR. Accounting scholarship: what is uniquely ours? Acc Rev 2001;76(2):275–84.
May L. Sharing responsibility. Chicago, IL: The University of Chicago Press; 1992.
Redman DA. Economics and philosophy of science. Oxford, UK: Oxford University Press; 1991.
Reiter S, Williams P. The structure and progressivity of accounting research: the crisis in the academy revisited.
Organ Society 2002;27(6):575–607.
Ronell A. Were they stupid, foolish, or just plain cruel? Chron Rev 2002:B4.
Rosenberg A. Economics? Mathematical politics or science of diminishing returns. Chicago, IL: The University
of Chicago Press; 1992.
Shearer T. Ethics and accountability: from the for-itself to the for-the-other. Acc Organ Society 2002;27(6):541–73.
Williams PF. The legitimate concern with fairness. Acc Organ Society 1987;12(2):169–89.
Williams PF. A social view on accounting ethics. Res Acc Ethics 2000;6:259–72.
Williams PF. Modern accounting scholarship: the imperative of positive economic science [working paper]. North
Carolina State University; 2002a.
Williams PF. Accounting and the moral order: justice, accounting, and legitimate moral authority. Acc Public
Interest 2002b;2:1–21.
Williams PF. Accounting involves ethics, not just technical issues. Strategic Finance 2002c:28, 64.
Wilson GP. President’s message. Acc Educ News 2002;(Fall):1–3.
Wolfe A. Whose keeper? Berkeley, CA: University of California Press; 1989.
Zeff S. American Accounting Association: its first fifty years. Sarasota, FL: American Accounting Association;
1966.