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React, Don't OverreactAugust, 2002 EXPECT ACCOUNTING FIRMS to “walk away from clients, even well-respected clients, when they have a different opinion” about accounting practices, the chief financial officer of Costco Wholesale told MBA students at this spring’s Arjay Miller Lecture. Richard Galanti, MBA ’82, also said he had noticed a change at meetings of the audit committee of the retailer’s board of directors since the Enron/Arthur Andersen accounting scandal erupted. “I see a much greater level of seriousness in their view and more interest in what they should be understanding.” While he views the fallout from the scandal as “good for everybody,” Galanti said he was dismayed by the number of companies “who early on dumped Arthur Andersen as their auditor after 50 years of doing business with them.” Costco management supported Arthur Andersen, he said, because of loyalty to the Andersen employees they had worked with for 18 years. “The individuals we have worked with have done nothing wrong,” he said. They worked in Andersen’s Northwest regional office, now acquired by KPMG. |
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React,
Don’t Overreact
