Nothing like the Enron affair could happen in France (!)

Abstract

This paper reviews the reactions of the French accounting profession and academia following the collapse of both Enron and Andersen. It considers policy statements and declarations on the part of the accounting profession, legislative changes, the general impact on university accounting education programmes and specific developments in accounting teaching at my own institution, HEC. It considers the value of using corporate scandals in the teaching process and claims that more accounting theory and ethical issues should be introduced in accounting educational programmes.

Keywords:

• Enron
• accounting education
• France
• accounting profession
• public accountant
• statutory auditor
• Association Francophone de Comptabilité

Acknowledgements

The author is a member of the GREGHEC, CNRS unit, FRE-2810. He has benefited from helpful comments from Yuan Ding and Thomas Jeanjean. He is also indebted to Ann Gallon for her much appreciated editorial help.

Notes

¹The full text used to be available at http://www.isce.edu/wwwboardmessages/138.html but appears to have been removed.

²Readers interested in the French statutory auditor profession can refer to Baker et al. (2001).

³A phrase borrowed from the field of the arts meaning the French difference or exception, often used to defend a French specificity. Over the years, the status of the ‘French exception’ has moved on to be recognised as having established ‘French-style auditing’, based on the specificities mentioned in the text.

⁴Other elements include a requirement for the Minister of Justice to be informed if any misdemeanour or crime (or ‘faits délictueux’) is detected in the course of the audit. Company directors must be alerted when the statutory auditor, in the course of his/her duties, observes anything likely to compromise the company's going concern status.

⁵Official bulletin of the Compagnie Nationale des Commissaires aux Comptes (Institute of Statutory Auditors) (Bulletin CNCC), No. 90, June 1993, p. 181.

⁶The statutory auditor will present an additional report, detailing his/her observations on the internal control procedures related to the preparation and treatment of accounting and financial information (Commercial Code, art. L. 225–235).

⁷H3C because of the three Cs: Haut Conseil du Commissariat aux Comptes.

⁸This association, created as the French Accounting Association in 1979, was renamed in 2002. As an academic organisation, its main objective is to promote research and teaching in the field of accounting (see www.afc-cca.com).

⁹This introductory course is the only required financial accounting course. Fifty per cent of the students usually take an additional optional course on intermediate accounting in their second year at HEC.

¹⁰This increase was obtained with no real difficulty given the current moves to adopt international accounting standards in the EU and the rise of accounting scandals.

¹¹This case study was created by my colleague (Yuan Ding) and I.

¹²In France, a financial accounting ‘specialist’ would typically take the following courses: introduction to financial accounting and financial statement analysis, intermediate and advanced (financial) accounting, financial statement analysis, corporate finance, managerial accounting and management control.

¹³The following description is partly based on the website of the Ordre des Experts Comptables (http://www.experts-comptables.fr/html/countries/gb/index.html).