The High Cost of Unaccountable Accounting; It's Time to Put the "Independent" Back in "Independent Audit."

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The High Cost of Unaccountable Accounting

"You need an operation," says the doctor in the old Henny Youngman joke. "But doctor," says the patient, "I don't want an operation." "OK, then," says the doctor, "for the same price, I'll touch up your x-rays."

It's an old joke, yes, but for too many of the nation's accountants it's something else. It's a living.

There they were, the accountants from the prestigious Big Eight firm of Arthur Young and Company giving "unqualified" audits - that's professional jargon for EVERYTHING'S OK OVER HERE - to Charles Keating's Lincoln Savings and Loan. This was at the same time regional federal regulators had concluded that Lincoln was a "ticking time bomb." Soon after, the bomb exploded, bankrupting thousands of investors who - at least partly on the strength of the Arthur Young audits - had been lured into uninsured junk bonds. And leaving …