Why the Economy — and Accountants — Are Doomed

Francine McKenna, a very smart cookie and also the author of the popular Re: The Auditors blog and a writer for Forbes and American Banker, says the next financial bubble is inevitable. The reason? Business and accounting students care more about getting a job than holding companies accountable.

Q: You’ve visited universities across the country recently. What are you finding?
McKenna: I’ve been getting a lot of invitations, specifically from the business schools, to talk about either the accounting firms or the scandals and frauds. (I’m also) getting some requests specifically about MF Global lately. People want to hear why this has happened, or who is at fault. But when you go and talk to these audiences, inevitably someone raises their hand and says you’re being too goody two-shoes; you’re being too idealistic; you’re not being practical; you’re expecting too much from people; nobody can behave the way that you’re suggesting because they’re never going to be able to get a job (or) they’re never going to be able to keep a job. People have given up. Maybe the students are not hearing the message strong enough from professors, because I think the professors are demoralized. All they want to do is make sure that their students can get a job. (They’re thinking) “push them out and get them a job, and I’ve done the best I can under the circumstances.” It’s really too bad.

Q: So students have learned nothing from the scandals over the past few years?
McKenna: You would think that students who were from families where they were the first to attend college, or where their parents are working really hard to put them through, would be a little more idealistic or sympathetic. But I think they’re actually more hardened. Because they’re more motivated to (think), “oh my god, I have to get a job and I have to do everything right, and I have to not screw this up because I’m going to have all these loans.” They very much want to buy into the program. I think that students who are from more privileged backgrounds have a little bit of a luxury to think of things more.

Is there a solution? How can schools train students to be better watchdogs?
McKenna: I think that the biggest pressure on anybody is the financial pressure. When you see public education in particular struggling; when you see the state universities – the ones that cater to the large number of students – struggling; when you see financial aid unavailable; when you see people unable to work even the simplest jobs to support themselves to go to school, financial pressures cause everybody to shut down and do what’s necessary. If we want people to be broader thinkers, to do good, we need to relieve the financial pressures. That means supporting public education strenuously during these times. (Students) need to have the luxury and the opportunity to take advantage of that time while they’re there.

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