No other profession in history can boast the dubious distinction to having precipitated at least one, and possibly more economic downturns, by blighting financial markets. It is not as if the 2002 U.S. recession was new. The bubble economies of the 1920's, and 1970's in the U.S, the decade long malaise of the Japanese economy, and the now faltering European (i.e, Franco-German) economy, each reveals the same professional fingerprints at the scene: accountants.

The accountant's M.O. is similar in each case: they fueled a culture of irrational exuberance with lax accounting and auditing practices. The holy grail of earnings per share has been pursued voraciously by the overstatement of earning (either by expense understatement and/ or revenue padding - Xerox, Tyco, etc, al) and/ or the misrepresentation of risk (e.g, Enron). In each case, the profession would have us believe that accounting isn't a perfect science, and that estimating future financial viability in auditing financial statements is more of an art than a science.

History and incriminating circumstantial evidence casts doubt on the credence of this plea of innocence. Regarding the incriminating evidence, auditors have formed a syndicate with management, financial advisors, consultants, tax specialists, politicians, etc, in order perpetrate a massive redistribution of wealth, away from outside investors, creditors (and in the event of a corporate collapse) employees, pension holders, and local communities. Using techniques that are structurally homomorphic with those of the pools and syndicates of the 1920's, gullible outsiders (including banks, pension funds, and individuals) are enticed to invest in stock prices, inflated by accounting numbers, that have been sanctified by 'independent' auditors, who themselves are authorized under the 1933-4 Acts by the U.S. government. Accounting firms are writing their own checks in this scenario: the non-expensing of options at Sprint or Microsoft, or the stretching of depreciation charges at Waste Management, each provides a cornucopia of phantom earnings from which consultants, auditors, brokers, and bankers might feast. The claim that accounting is intrinsically an uncertain science is not borne out by the predictable manner in which these firm have been able to systematically loot corporate treasuries.

Nor does comparative or U.S. history support the Profession's protestations of innocence. Before CISCO's pooling and purchase takeover binge, we had (nearly two decades ago) National Student Marketing, Leasco, and Paramount Pictures. Before Xerox's revenue inflation, we had Regina Vacuum Cleaners. Even Enron's con of a $200,000 trading room, fabricated for a 'meet-the-press' visit, had antecedents in ZZZ Best's phony fire restoration business (also specially prepared for on on-site visit). And again, those employee pension holders that lost massively at Enron, can take solace in the thought of the company they share with employees whose pensions fell foul of Robert Maxwell's publishing empire (indeed, in terms of our accounting 'history': Maxwell has appeared twice, first as tragedy in the 1960's Leasco affair (where the Board of Trade divined him 'not a fit person to serve as a director of a public company) and second as farce, in the 1990's, where he misappropriated some $700 million pension funds.

Lest this dismal account of accounting mishaps be thought to be unique to the U.S, other comparisons from abroad also give cause for skepticism. Is the Japanese banking crisis (with overvaluation of crossholdings, and therefore an overstatement of assets and therefore minimum capital) so different from the $500 million Savings & Loan's debacle in the U.S. In both cases, overvaluation of real estate holdings was an additional common feature. Is the giddy expansion by takeover, merger, and inflated earnings, and earnings per share, so different between Vivendi International in France, and CISCO Systems here at home?