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“Always do right. It will gratify some people... and astonish the rest.” That’s how Ernst & Young Chairman and CEO James S. Turley, attributing the statement to President Harry Truman, ended a recent speech to the Detroit Economic Club.
Referencing the fallout from the recent wave of corporate scandals, Turley said the accounting profession “not only survived, but emerged better for the experience,” and cautioned that the business community needs to continue to rebuild public trust and balance the competing demands of globalization. He warned about efforts to weaken Sarbanes-Oxley now occurring in the legal and legislative arenas.
"Despite all such challenges,” Turley said, “I am optimistic about the global economy and financial markets. I am optimistic for our profession. I am optimistic about our firm.”
Leadership from the accounting professional is essential, he said, adding “recent events have clearly demonstrated that what we do matters a great deal.”
“The return of public confidence is fragile,” he said. “It has tiptoed back, at best, rather than rushed back. The scares from recent scandals are still fresh. And I think we all should be concerned that investor skepticism and mistrust might re-emerge, perhaps more deeply than before, if the investing public senses an effort by the business community, elected officials, corporate executives, or others, to undo or water down the basic reforms that have been put in place.”
The Center for Corporate Citizenship believes that ethical financial management of a firm is an essential part of corporate citizenship and encourages the accounting profession to take strong leadership. As Turley said in his speech, “… part of the value we do is providing the foundation of assurance to all stakeholders that companies are playing by the rules – whether it’s accounting rules, financial-reporting rules, or tax rules. We help create confidence in financial data.”
In discussing Sarbanes-Oxley, Turley said the legislation “changed the nature of our relationships with companies.” He said the “client” shifted from the executives to the audit committees and advised the investment community to be more attentive to this shift.
The value of managing varied stakeholder interests was also cited by Turley as important to rebuilding trust. “We’ve learned the dangers of arrogance, the importance of listening, and the importance of engaging on a regular basis with a wider range of stakeholders – companies, boards, policymakers, opinion leaders, investors – and of establishing stronger bonds with academia.”
In his remarks Turley was refreshingly frank in his assessment of corporate ethics and accounting practices of the last dozen years. Ernst & Young did not escape his candor. “Quality and integrity were explicit at Ernst & Young when I was hired in 1977. They were explicit when I made partner in 1987. Yet in the '90s there was a time when quality and integrity became, in the financial world, in the profession, and yes, even in my firm, more implicit than explicit.”
» Read the full text of the speech (pdf, 54K) or view the video.
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