There are financial accounting scandals, and then there are financial scandals created by accounting.
Financial accounting scandals are typified by the kind of fraud that bilked investors of assets in the 1990s. From Enron to WorldCom, companies cooked their books, hiding losses and risks from investors while making money for the owners of the enterprises themselves.
Some of those schemers got away with it, others are off to jail. All of it amounted to business ethics gone downhill with damaging effects for the nation and the economy.
But in their wake, there are now brewing scandals created by financial accounting that also may cost investors money. Except these scandals are the very accounting rules and financial reporting reforms aimed at correcting the financial accounting scandals of the past, such as the Sarbanes Oxley Act of 2002 and the Financial Accounting Systems Board's Statement 133 of 1998.
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