(2008) A Critique of the Diagnosis and Cure for 'Enronitis
': The SarbanesOxley Act and Neoliberal Governance of Corporate America, Critical Sociology vol.
: Why Good Corporations Go Bad, 2004 COLUM.
Cases showing widespread corporate book-cooking (what I call "Enronitis
") dismayed foreign investors, who slowed their investment in dollar assets.
"Fingers out" for boards whose companies suffered from Enronitis
is equal to "ground" for UPS: In both cases, these words ruled out actions needed to assure shareholder value.
(116.) However, Greenwood does revisit these issues in a later 2004 article, Greenwood, Enronitis
, supra note 10, that I will discuss infra in Part V of this Article.
How Europe is struggling to handle the spillover effects of Sarbanes-Oxley for Europe's accounting profession was explored by this author in "Preventing European Enronitis
" (TIE, Summer 2004).
Merlin (2002), "Does Enronitis
Threaten the Dollar and the Economy?", Business Economics, Vol.
Paul Horne, an independent market economist, and Albert Merlin of Incopar of France for "Does Enronitis
Threaten the Dollar and the Economy?" (October 2002)
The scandal has even been added to our lexicon: "Enronitis
." How can future Enrons be avoided?
One of the symptoms foreshadowing the outbreak of "enronitis
" was the divergence between the national accounts and the stock market measures of profits: in the three years to 2000, the latter consistently outpaced the former.
The lack of confidence in underwriting should not be understated, as the countervailing theory of "Enronitis
" is the cockroach theory--if one is found in the kitchen, there are probably more in the basement.
Financial simplification, through revision of basic accounting standards, is a part of the remedy for "Enronitis
" and part of what is needed to provide the American investing public what it needs to evaluate risk, compare risk levels among investments, and arbitrate the worth of one corporation's stock with that of another.