While some universities are supplementing existing courses with infamous cases, others are creating new courses based on corporate fraud cases involving the likes of Arthur Andersen and Enron Corp.

The questionable bookkeeping methods by top management of major U.S. companies will serve as a backdrop to a new course being offered at California State University, San Bernardino, on ethics in accounting.

The course, "Accounting, Law, Ethics and Institutions," will examine corporate ethics, including the implications and effects on investors, businesses and government when companies manipulate their financial statements.

The class is a direct response to recent revelations and investigations of large companies and their officers that have allegedly manipulated or held back information to further their own profits, often at the expense of shareholders and company employees, according to an Aug. 8 release from the university.

Lecturer Steven Mintz will be teaching the course, which will be offered to business and accounting students, during the fall semester. The goal is to instill a strong sense of ethics in students, Mintz said in the release.

"Our hope is that they will resist pressures imposed by some in top management to be a team player and possibly become part of the kinds of scams and cover-ups that have brought down too many U.S. companies," Mintz said.

University of California, Irvine is offering a course beginning Sept. 30 titled "The Enron Case." Sixty students have already signed up for the two-credit course that will feature a list of speakers, including former Enron employee Sharon Watkins, a key witness in the case.

An experimental course in forensic accounting at California State Polytechnic University, Pomona, did not originate from the accounting scandals, but it's timely: The course teaches students to identify types of corporate fraud and also to alter a company's internal control systems to keep it from happening, said Accounting Professor Vicki Peden, who is teaching the course.

The scandals give "good examples of how fraud was committed by manipulating earnings," Peden said.

"The news media has provided us with great examples of the types of things we are teaching."

The course was offered for the first time during the spring quarter and will again be offered in the winter quarter, before it is submitted for consideration to become a permanent course, she said.

Twenty-eight students took the 10-week course this spring, the maximum amount of students allowed to sign up for a course, Peden said.

The course will touch on many subjects dealing with accounting fraud, including money laundering and organized crime, and the role of internal auditing in finding fraud.

Students will receive a heavy serving of corporate ethics to balance the message of the class, Peden said.

"We want to show the bigger picture of fraud. How it affects the people who commit fraud and what it does to their lives and how it affects stockholders," she said.

Ethics is a challenging concept to teach, she said.

"You can't really change someone's ethics," she said. Peden hopes that the class will prevent at least some of her students from committing fraud in the future.

According to a survey in the August issue of CFO Magazine, 11 percent of senior financial executives surveyed responded that they had been pressured more than three times by their superiors to misrepresent financial results during the past five years.

The emphasis on ethics in light of the current scandals is a good thing, said Carl Pon, managing partner with the accounting firm of Vicenti, Lloyd & Stutzman in La Verne.

Even with more than 20 years of experience as a certified public accountant, Pon is still required to take an ethics course sponsored by the California Society of Certified Public Accountants every six years.

CPAs need reminders about what is considered ethical, he said. "Some things that weren't ethical 25 years ago, are ethical now."

Without these courses, people might be less willing to challenge superiors who ask them to cook the books, he said.

"I don't recall that there were any ethics courses 20 years ago when I was in school," he said.

-- Robert Chacon

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