The Public Relations Strategies of Public Accounting Firms: An Analysis of Accounting Firms’ Website Content Surrounding the Enron Scandal
Open Access
- Author:
- Cataldo, Angelisa
- Area of Honors:
- Letters, Arts, and Sciences (Abington)
- Degree:
- Bachelor of Science
- Document Type:
- Thesis
- Thesis Supervisors:
- Carla Chamberlin Quinlisk, Thesis Supervisor
Carla Rae Chamberlin-Quinlisk, Thesis Supervisor
Ross S Brinkert, Thesis Honors Advisor - Keywords:
- accounting
Enron
website content
public relations - Abstract:
- In 2001, the Enron Corporation declared the largest bankruptcy at that time. Beyond its significant financial impact on Enron’s many stakeholders, Enron’s bankruptcy represented a defining moment in the professional accounting field. The bankruptcy was the product of years of fraudulent financial reporting that developed and persisted despite various audits performed by a prominent accounting firm, Arthur Andersen. Prior to the Enron scandal, the corporate environment was characterized by intense competition and profit motives. As a result, accounting firms faced substantial pressure to satisfy their client’s desire for revenue growth in order to maintain and increase stock prices. In addition, accounting firms placed greater emphasis on consulting services that provided higher profit margins than on audits. The increase in consulting placed additional pressure on accounting firms to satisfy their clients in audits in order to retain their consulting business. After Enron, the integrity and professionalism of the accounting profession was questioned. Confidence in both accounting firms and their corporate clients declined significantly. In addition, legislation resulting from the Enron scandal emphasized ethical accounting practices and transparency in financial reporting. The credibility of a service firm, including accounting firms, is imperative to acquiring and maintaining clients. The significant change in the accounting environment before and after the Enron scandal and the subsequent erosion of confidence in the accounting profession raise the question of the reactions of individual accounting firms throughout the period. This thesis examines accounting firm websites in the years before and after the Enron scandal in order to evaluate their reactions to the changing professional environment. As a result of a content analysis, this thesis finds a significant change in the content of accounting firm websites after the Enron scandal. A quantitative increase in language associated with ethical concepts in relation to language connected to performance is found. In addition, a qualitative shift in language that focuses on ethics is explored.