Allegations of fraud deepen Compton's financial troubles
The Compton mayor's allegations of fraud at City Hall have at least temporarily killed the cash-strapped city's ability to get a line of credit to pay bills and prompted the resignation this week of the interim city manager.
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#1 Jan 14, 2012
#2 Jan 14, 2012
Compton sounds like Montebello during the administration of Vasquez, Salazar, and Urteaga.
Bring on the Auditors
#3 Jan 15, 2012
Teaching ethics is the latest chapter in U.S. accounting scandals
Azusa Pacific University business and management professor John Thornton talks about the new accounting school coming to the Azusa campus Jan. 9, 2012.
An accounting firm performs a questionable audit, blindly accepting inflated revenue values, glossing over the client's "creative financing techniques."
Eventually, that company collapses, taking with it the number crunchers, whose reputation is now as worthless as their client's stock.
It's a scenario played out dozens of times in the last 10 years.
First Enron, then WorldCom, then Global Crossing, AIG, Bernie Madoff, followed by the collapse of accounting firms, the most infamous being the demise of Arthur Andersen in 2002.
Now, local colleges training up future accountants are not only using these colossal failures as case studies in what not to do, they're pumping up their curricula to include ethics lessons from Aristotle to Jesus.
One of those is Azusa Pacific University, which added an endowed chair for ethical auditing this semester and will launch its first master's degree in accounting this fall.
John Thornton was recruited from Washington State University to head up APU's new L.P. and Timothy Leung School of Accounting started by an $8.6 million gift to the university from Leung, a one-time APU student and successful CPA from Los Angeles.
Thornton knows he has his work cut out for him.
"I say accounting ethics and people say oxymoron. They laugh," Thornton said.
"To me, accounting ethics is redundant: Accounting that is unethical is no accounting at all.
It is just a lie."
At APU's new accounting ethics class,
Thornton mixes Aristotelian philosophy with biblical principles to train future accountants to be competent and of good character.
Often, that involves using biblical illustrations, such as Daniel, who served two kings honestly, was trustworthy and was not negligent.
While he was promoted twice, he refused to walk away from his beliefs, Thornton said.
"Four thousand years ago, if you were in charge of the king's assets, the important thing to do was to be trustworthy and be neither negligent or corrupt.
Daniel is an example who goes beyond Christianity, because Islam counts him as a prophet,
and he was a Jew," Thornton said.
Thornton was the chair of professionalism and ethics for the American Accounting Association. The group gave WorldCom whistle-blower Cynthia Cooper an award for telling the truth about corrupt accounting activities at the company.
He said accounting codes of the last 100 years rarely mentioned ethics.
At the turn of the 20th century, the only requirement was "to be a Protestant man," he said.
In the last five years, accounting codes in many states have tightened up considerably as a result of deceitful practices on Wall Street and fraud at major corporations and in the mortgage industry.
The state of California now requires 10 units of ethics courses, of which three must be accounting ethics, to become a certified public accountant.
#4 Jan 15, 2012
"Here at USC, we have woven ethics decision-making into the fabric of all our courses," said William Holder, dean of the USC Leventhal School of Accounting.
#5 Jan 15, 2012
"It's important to have an integrated approach because ethical conduct always has to have a context."
But Holder supports the added state requirements for students to take three units of accounting ethics and said he "applauds what the folks at APU are doing."
In addition, accountant practices are under more scrutiny from the state Board of Accounting.
Thomas Palmeri, a CPA from Covina who has taught accounting at Mt. San Antonio College in Walnut for 15 years, also supports the added emphasis on ethics in accounting and auditing.
"I tend to harp on ethics with my students ... I say `you will be held responsible for this stuff,"' Palmeri said.
One example of the crackdown is a new policy instituted about a year ago by the state board that requires peer reviews of audits. "Another CPA will look at my work to make sure I meet the standard," Palmeri said.
But whether accounting ethics classes or peer review will prevent an accountant from turning a blind eye to fraud or caving in to a client to keep from losing the account is another matter entirely, he said.
"You can teach it but will the students honor it?" Palmeri asked rhetorically.
Thornton says the only way to take away the temptation of greed is by strengthening one's religious beliefs. Philosophy alone is not enough.
One principle he teaches at APU, whose motto is God First! and where instructors are required to incorporate the tenets of Christianity into the classroom curricula, is espoused by Jesus in the New Testament: You can't serve God and money.
"So if you are a Christian accountant and take Jesus seriously, then greed does nothing for you. Are you going to get more God?
It is a master issue," he said.
But even religious professionals such as pastors bend to pressure, or practice situational ethics.
"The Greek mindset is to know the good is to do the good," Thornton explained. "It's like `Don't do drugs.'
#7 Jan 15, 2012
Seems that having the lowest standards for political representation in the Nation continues to plague LA County. Why do the Democratic voting majority hate the County so much that they accept terrible out comes as all their families deserve? Very strange!
#8 Jan 16, 2012
Van Nuys, CA
Montebello is another Latino ghetto putting a blight on San Gabriel Valley,
it's sad to say and probably not politically correct but true.
It does not take lots of money to buy a cheap lawnmower and some paint to paint the house with and make your property look halfway decent.
If people stopped buying 20" rims for their Denalis and Escalades and other nonsense, these communities might fare better and be looked upon with more respect.
12 yr olds should be doing housework/homework instead of partying and doing drugs.
It will probably never change though until Montebello PD gets sued for racial profiling.
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