PBS's Frontline tonight delves into the roots of the lax accounting rules that cause investors to take it in the shorts from Enron, Sunbeam and other stock collapses.
Hedrick Smith puts together a persuasive case that greed overcame honesty, most importantly in Arthur Andersen, whose founder must be spinning in his grave. There is plenty of blame to go around.

One thing that I thought was wrong, however, was the implication that tort reform somehow contributed to this. I can't see how paying huge fees to trial lawyers is good for either investors or companies. I'd much rather see these people in jail. "Chainsaw Al" Dunlap paid cents on the dollar for his sins, which did zip to make the victims whole who had bought stocks he helped inflate.

One thing I think is important to say as well is that just because some businesses buy politicians and create this kind of scandal doesn't mean that the anti-business rhetoric of the left holds any water. I think that the Andersen story will sober up a lot of accountants and auditors. I guess each generation has to relearn the same old lessons. Honesty and value are important, and if you don't understand a business model, don't buy into it.