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The collapse of Enron Corp. has turned a political spotlight on accounting standards and the regulation of accountants. This is not necessarily a good development since the politicization of accounting principles and influence peddling in Washington by Enron and its auditor, Arthur Andersen, are part of the backdrop for the Enron scandal. Of 248 senators and House representatives serving on the 11 Congressional committees that are investigating Enron, 212 received campaign contributions from Enron or Andersen. [1]Further complicating reform is the fact that the current chairman of the Securities and Exchange Commission, Harvey L. Pitt, a lawyer, previously represented the American Institute of Certified Public Accountants (AICPA) and Big Five Accounting firms in private practice, and an interim appointee to the SEC, Cynthia A. Glassman, an economist, was previously a principal at Ernst & Young. [2]Although the financial press has insinuated that this makes reform questionable, if there ever was a Commission with the requisite expertise to address the problems of regulating accountants it is this Commission. Perhaps because the press is questioning everyone’s credibility and clamoring for more regulation an effective new regime will emerge from the scandal. Chairman Pitt has made a good first step in addressing the issues in his public statements of late January 2002 and his testimony before Congress recommending the creation of a new self-regulatory organization (SRO) for the accounting profession. [3]

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