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As the debacles ‘hit home,’ B-schools see interest rise

Ethics and accounting classes used to be boring. Then came Enron.

As business schools across the country assemble their courses for the fall, corporate
America’s financial scandals figure prominently in the mix.

By Beth Healy, Globe Staff

The Graduate School of Management at the University of California at Irvine, has
already filled a new class called ”The Enron Case.” Fifty-five students signed up, and
dozens more are on a waiting list. Professors at Harvard Business School – which
counts among its graduates President Bush – are working on numerous Enron case
studies, and Northeastern University is seeing a surge in popularity of its
accounting-fraud class.

G. Peter Wilson, an accounting professor at Boston College’s Carroll Graduate School
of Management, said Enron and other high-profile auditing debacles have sparked new
interest in the subject he’s taught for years.

”The students are sitting on the edge of their seats,” Wilson said. ”And now you’ve got
the president of the United States saying how important confidence in numbers is to
the markets.”

It’s not that the accounting concepts have changed, he said. He has always taught
students that overstating revenues, for example, can ultimately hurt shareholder value.
But before this year, he said, ”It just didn’t hit home. Now it’s obvious to the world.”

At the University of California, professor Richard McKenzie said the Enron class grew
out of a project to study one company from many directions, rather than the usual
model of tackling one case per company. Lecturers for the course will include an
energy economist, two accountants, a specialist in corporate strategy, a philosophy
teacher, and Enron whistleblower Sherron Watkins, among others.

”We could probably spend a whole year on Enron,” McKenzie said. He’s hoping the
students learn more from the class than just the details of one scandal. The goal is to
encourage discussion of business practices and strategy, and policy issues, he said.

The course may be striking a chord with students who often say they’re interested in
business ethics but then stay away from such classes in droves. Last year, the ethics
class was poorly attended, McKenzie said. It may even be canceled in September, as
students pile into the Enron class.

At NU, lecturer Michael Cottrill says demand for his course ”Fraud: the Dark Side of
Business” has boomed in the past year with college seniors who’ve seen the topic
dominating daily business headlines. He created the class four years ago as a
periodic offering and last spring had to add an extra class due to the spike in interest.
This September, he’ll teach the class in the fall semester for the first time.

Cottrill said he aims to train students to spot and stop fraud in their future business
careers, and also to be aware of other forms of wrongdoing, like identity theft and
credit card fraud. Coursework includes talks by FBI investigators and readings from
books.

Whether a class has the Enron name on it or not, the topic is sure to come up in
virtually every subject, teachers said. Said BC’s Wilson, ”Graduate students are
simply not going to allow you to walk around issues.”

Harvard Law School is offering a business class in the fall on the issues facing
corporate directors, taught by former Fidelity Investments executive Robert Pozen. At
Harvard’s business school, there is no plan so far for a course specifically on Enron,
spokesman Jim Aisner said, but several courses will include case studies on the
company.

Aisner said the business school requires students to take a three-week ethics class
when they first enroll at Harvard. ”It’s a part of … how business is taught here,” he said.
”It’s not like going to church on Sunday and then doing what you want the rest of the
week.”

MBA courses can’t help everyone though. Ex- Enron chief Jeffrey Skilling is, much to
Harvard’s chagrin, a graduate of the B-School.

Beth Healy can be reached at [email protected]. Ross Kerber of the Globe Staff
contributed to this report.

This story ran on page C1 of the Boston Globe on 7/10/2002.
© Copyright 2002 Globe Newspaper Company.

http://www.boston.com/dailyglobe2/191/business/As_the_debacles_hit_home_B_schools_see_interest_rise+.shtml

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