I only heard the interview once. Tiger didn’t directly say that he had been screwing around, but his comments were easy to interpret given their context. I could be mistaken (frequently am) but I think Tiger’s meaning is, “I lied and cheated, causing harm to wife and mother and fans. I’m sorry. I won’t do it again.” Would you agree this is his message?
There have been a number of spectacular audit failures in recent history. Clean audit opinions to bogus financial statements were followed by bankruptcy (in many cases) and lawsuits. To the extent that audit firms knowingly gave clean audit opinions when they should have blown a whistle and called, “Foul!” I think it a fair summarization in such cases to say the audit firms lied and cheated.
Does anyone ever recall one of the firms making a Woods type of apology? I don’t think so.
A while back, I wrote a post titled, “They Still Don’t Get It.” This was a follow up to a well-known speech by Arthur R. Wyatt on August 3, 2003 to attendees of the American Accounting Association national convention: Accounting Professionalism–They Just Don’t Get it.
I said:
He spoke to the annual conference as to why things got so bad that one of the Big 5 went kaput, and it was just happenstance that it did not happen to any of the four survivors.
I think Wyatt considered Arthur Andersen’s fate to be deserved, as he described an historical evolution that resulted in Andersen abandoning its responsibility …
Has the tone at the top changed? Apparently not. I believe the tone at the top of the [large audit firms] is as commercial and greedy as it ever has been. The firms’ personnel have not been changed. It is unlikely that their hearts and desires have changed. And according to anecdotes, it has not.
Said by a good friend of mine, money too frequently trumps morality.
Does Tiger get it? I think so. His current intentions seem clear (although his motivations aren’t). Public confessions have symbolic importance. Baptism and marriage are public statements that don’t need to be made. Being born again is an internal make-over, and cohabitation with benefits is a lifestyle choice. Going on the record with a formal statement is a request for public judgment should you ever fail.
To be sure, Tiger’s statements in the interview are vague, and there is little admission of fault. Never-the-less, his interview is a symbolic admission. Also, he doesn’t seem to be asking for fans to forgive and forget. That is refreshing. When Tiger met privately with wife and then mother, they would not have let him get away with being vague. He would have had to be specific in his confession.
Do the large audit firms get it yet, and are they doing the right thing? Doubtful.
Large audit firms get sued after audit failures, and they sometimes pay out large sums of money in settlement (they seldom let cases get to judgment phase so as to avoid being found at fault). I think that if they really were serving the public interest, they would acknowledge responsibility for their audit failures. Confession is good for the souls of both the confessor and the parties that receive them.
Paul Williams, a North Carolina State University professor, says on AECM,
It isn’t in the nature of public accounting firms to ever say “We’re sorry” since they are so frightened of being sued. Corporations are never sorry; they have no shame.
The subjects in my dissertation done 33 years ago were revealing about the corporate mentality. Moderator variables in the experiment I did with high level managers in various corporations were measures of their values and attitudes. The vast majority of them were morally amorphous, i.e. amoral. They didn’t evaluate things along ethical dimensions. If it was legal, it was okay.
I haven’t been holding my breath waiting for a large audit firm to accept responsibility, but it would be nice if they did. I’d be able to breath easier.
There have been so many audit failures that I feel like a cheated upon spouse. Receiving an apology might not get me to the stage of forgiving and forgetting, but it would help me deal with several issues.
Will the failure of large audit firms to fully get it, never to issue some sort of apology, hurt them?
I think so. For decades I was a trusting accounting professor, teaching my students that auditing is a noble calling. The last time I made such a statement in class, I flinched on the inside.
Students notice. Hey, we all notice. That’s why public statements are so … public.
Debit and credit – - David Albrecht
To what extent can any non human person – such as an audit firm, a corporation or a government, a church, express regret, or indeed any emotion at all? Is that internalized feeling not necessary for there to be a meaningful apology? These bodies may or may not be legal persons, but they are not sentient beings. Individual humans can express apologies because they can feel, but it is not clear to me that an audit firm can.
Having said that, it seems to me that it is not unreasonable for individual leaders of such bodies (e.g Mr Toyota of Toyota regarding problems with cars, Kevin Rudd, prime minister of Australia regarding treatment of aboriginal peoples) to express their individual apologies in respect of actions carried out by other individuals associated with the organizations which they currently lead. Such apologies, made by individuals, can have the intended impact – that of openly acknowledging the hurt of the parties and who it is that bears responsibility for the hurt.
Dr. Albrecht,
While you are making a really good point, I can see why corporations, and audit firms for that matter, would not want to apologize or admit fault.
With Tiger admitting he was wrong, shows humbleness and attracts compassion. A corporation admitting it was wrong, implies incompetence [at least to me]. I think a corporation has not the same “privilege” as a real person in this instance.
Hi David,
I like your post very much and especially enjoyed the Tiger Woods analogy.
However, I’m not expecting any apology from the Big 4 Public Accountants, but not for the reasons you might think.
The “public accountants” are not paid to do anything in the “public interest.” They don’t take vows of public service and they’re not paid by the public. Why the public continues to think the “public accountants” owe them something is a mystery to me. But I guess at one point in time, common belief was that the world was flat, also.
So, I don’t expect an apology from professionals who have been serving their paying clients’ needs. Even when their work did break the law. You see, I don’t expect apologies from hardened criminals. All the criminals I’ve known have only been sorry they got caught, not that they committed the crime.
We need to fix the audit structure, not necessarily every audit professional. Once auditors are selected, managed and paid for by the regulators or “investing public” who want the “independent audit” then the good guys will line up on one side and the crooks will go elsewhere, where the financial rewards will obviously be more lucrative. . .
Two of your recent posts talked about the worthlessness of the accounting/audit industry and/or striking some kind of a counterbalance. If you read my most recent post, “Massages Gone Wild,” (which I know you did since you were kind enough to comment on my site), I think you’ll see how difficult it will always be to establish a functional system of checks and balances until the flawed audit foundation is fixed.
http://saramcintosh.wordpress.com/2010/03/22/massages-gone-wild/
Ciao for Now,
Sara McIntosh