It's hard to believe that five years after Enron's failure as a result of fraudulent financial reporting, we're still dealing with the fallout. But as the stock-option backdating scandal suggests, corporate accounting and disclosure continue to display far more creativity and wiggle room than regulators and investors would like. Finance executives might be tempted to believe they've already done more than enough to allay concern simply by complying with the many demands of the Sarbanes-Oxley Act. But as our special report in this issue explains, profound changes may yet be required of them if the SEC and FASB have their way.
If further revelations of corporate chicanery continue to make headlines, voicing complaints about the undue burdens of regulation will not inspire faith in management's honesty and integrity. Indeed, the louder the calls for a hiatus in new rules or the rolling back of existing ones, the less reason investors may have to place their confidence in companies issuing such demands.
Yet there may be reason for hope that Enron can at long last be put behind us, if not forgotten. In the survey that accompanies our special report, finance executives express a much more modulated response to current reforms than various lobbying campaigns would suggest. Indeed — dare we say it? — they have found some benefit to Sarbanes-Oxley. Whether they respond positively to the proposed changes we describe remains to be seen.