Much of the debate about the Enron debacle and its implications for the accounting profession has focused on the differences in corporate governance structures and financial reporting conventions between the UK and the US.

But one of the weakest links in Enron's reporting function is consistently overlooked: the accounting and business education of Anderson's staff and Enron's executives. The role of accounting and business in the collapse of Enron, and the potential contribution that business ethics education, in particular, could make towards addressing the crisis in financial reporting seems to have been ignored.

This omission is surprising. Following the savings and loan crisis in the US in the 1980s that led to the bankruptcy of the Federal Savings and Loan Corporation, there was much finger pointing at colleges and universities. It was argued that they had failed to produce technically competent accountants. In response to these criticisms, the American Accounting Association set up the Accounting Education Change Commission in 1989.

The scandal surrounding Enron and Worldcom indicates not that education reform has been attempted and failed, but that more substantive and radical changes are necessary - nothing less than an independent and systematic review of secondary, tertiary, professional and post-qualification accounting and business-ethics education. This applies as to much to the UK as the US.

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UK accounting education is geared to producing students with good technical competencies but with little political or ethical understanding of accounting and no ethical or emotional skills.

A growing body of evidence suggests that conventional accounting education stultifies students' ethical development. What this research indicates is that the issues run deeper than the AECC realised. Corporate governance structures, accounting standards and other forms of regulation all need to be critically and ethically scrutinised.

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However, the reality is that most of the accountants who pass though our system of accounting education are ill equipped to do so.

Ken McPhail
Department of accounting and finance
University of Glasgow