Focus on business, accounting practices

Understanding all the ins and outs of the collapse of Enron Corp. appears to be beyond even the grasp of financial experts who closely followed the giant utility company.

And it's certainly a dark hole for the many politicians who want to turn Enron into a bull's eye for this contentious campaign year.

In the weeks since investors learned they lost billions of dollars while Enron executives cashed in under the protection of all-too-rosy financial reports, much of the nation's education about what happened has come from congressional grandstanding and threats of lawsuits over lost investments in state retirement funds -- including Missouri's teacher retirement fund, which is out more than $30 million.

Much has been made of the political contributions Enron made, but the waves of outrage have subsided as it has become clear that Enron gave money to hundreds of candidates without much regard for political affiliation.

Rightly, then, the thrust of the focus has shifted to the decisions -- and the people making those decisions -- inside Enron and, perhaps more importantly, at the Arthur Andersen accounting firm.

Of utmost concern is the accounting practices that allowed Enron to fool thousands of investors, large and small, along with state and federal regulators into believing the company was in good shape. On top of that came the questionable shredding of vital documents by Andersen, one of the giants in its industry whose name has long been associated with the elite of accounting firms.

Suddenly, a lot of people are wondering: If a company like Enron and an accounting firm like Andersen did all these things, what other companies and accounting firms are conducting business in a similar fashion? It's unfortunate, but well-run corporations and accounting firms with the highest professional ethics are now being called into question.

Which brings us to all the claims that there needs to be more regulation of corporate America and accounting firms need more rules to follow.

Indeed, some changes may be needed, particularly among the penalties for violating the copious accounting guidelines already in place.

And don't forget a crucial point: If Enron and Anderson had abided by the established accounting guidelines already in place, Enron might still be a failed corporation, but it would have collapsed under the weight of its own bad decisions and would not have been able to hide these missteps from investors.

So the question is this: Can regulators adequately police the accounting systems we already have? And how should Enron and Andersen officials be held accountable?