Skilling and Lay convicted in Enron case. See the full report on CNN.com.
If you can imagine it, here’s an amusing sidebar to the story…
In the wake of Ken Lay receiving over 100 years of prison time, the world wonders how an “Enron” could have ever happened. Addressing this question is former Arthur Anderson CPA Chris Sernel who got fed up with auditing companies like Enron and quit to become a rock star!
Said Sernel, “It’s no surprise that something like Enron could happen when 75% of all audit work of big firms is done by 24 and 25-year-olds who are just a few years out of college. While at Arthur Anderson, I’d be sitting across the desk from CEOs of a multi-billion dollar companies. It was an intimidating experience having to ask them tough questions, like hey, this doesn’t look right.
“I’m actually amazed that there are not more corporate scandals against CEOs of big companies since we’re relying a lot on what the likes of the Ken Lays and Jeff Skillings of the business world represent as true.”
Sernel is referring to the standard operating procedure in the world of accounting that only requires an auditing firm to obtain a management representation letter signed by a CEO stating that they and their employees were truthful in all their communications with their auditors and that they provided full disclosure of any and all documents necessary to complete the audit.
“Your audit is only as good as the information you receive. It’s like garbage in, garbage out in a computer. You can’t find an error on documents that were selectively never provided.”
Sernel added, “Between the scandals and tons of new rules, it was frustrating. While at Anderson, I just got sick and tired of working 100 hour weeks finding potential errors and issues, only to see that the client ultimately was given an auditor’s ‘clean opinion’ by Anderson managers. This was due in large part to the pressure of knowing that the client is paying the auditor’s bills. In Rock and Roll, our fans pay our bills. The pressures are the same to give people their money’s worth but rising up to meet the pressures in the world of Rock and Roll are more in intellectually honest and rewarding.”
With the new attitude of, “when the going gets tough, the tough pick up a guitar and go on tour”, CPA Chris Sernel left the Arthur Andersen accounting firm to become a fulltime Rock Star, touring with multi-platinum acts like Switchfoot, Ryan Cabrera, Hanson, Taproot and others.
Sernel and his band, “Escape From Earth”, (which has also been nicknamed “Escape from Enron” and “Escape from Anderson”), were featured in a Coca-Cola/MTV commercial.
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In other Enron news…
Fast Company has dusted off an interview (circa 2001) with Jeff Skilling that never ran in the magazine. Chuck Salter (the author) writes, “The interview didn’t make the cut – it was heavy on platitudes and self-promotion – but the transcript reads better now than it did then, especially in light of [the recent] convictions.”
You can read the post here.
Images courtesy of Associated Press.
