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series in which reporters drop in on interesting classes
throughout the university's eight academic divisions.
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The course: Selected Topics in Finance and
Economics: Corporate Fraud. 3 credits. Offered by the
School of Professional
Studies in Business and Education.
The instructor: Richard L. Konigsberg, an instructor
at Johns Hopkins who is a full-time CPA and has a public
accounting firm in Westminster, Md.
Meeting time: 6:15 to 8:45 p.m. on Wednesdays, Fall
Syllabus: In today's corporate world, corporate
fraud has become a major issue in user confidence in
publicly held businesses. Students will explore the
corporate culture to learn why, when and how fraud occurs.
Techniques for fraud prevention are discussed from both
management's and investors' viewpoints.
Course work: Students participate in class
discussions and ethical debates for 25 percent of the
semester grade. A midterm worth 15 percent and a final exam
worth 25 percent consist of several essay questions on the
reading and lectures. Students also do a group project for
35 percent of the semester grade. Each group chooses two
annual reports of publicly traded companies that have not
been known to commit fraud and analyzes the companies for
the possibility that fraud exists. Groups give a 15-minute
presentation and write a 12-to-15-page paper on their
Required reading: Students are expected to read
publications like The Wall Street Journal, Fortune,
Forbes and Investor's Business Daily. Required
texts include Power Failure: The Inside Story of the
Collapse of Enron by Mimi Swartz, Disconnected:
Deceit and Betrayal at WorldCom by Lynn W. Jeter and
Final Accounting: Ambition, Greed and the Fall of Arthur
Andersen by Barbara Ley Toffler and Jennifer
Heard in class: "In order to maintain their
reputation [at Arthur Andersen], what are they doing in
this time [1930s and '40s]? They fired the clients if they
didn't toe the line. That's the opposite of what's
happening today." About training: "The whole thing was
called the Andersen Way. The first week they got there ...
they went to the office to be introduced to everybody.
After that they went to the training facility for two
weeks. You weren't allowed to do anything but be
indoctrinated for two weeks. What were they indoctrinating?
Everybody had to be trained to do the audit in exactly the
same way; it didn't matter what industry or country. ...
You were told how to dress; you were told to be seen
— there were only certain restaurants to go to. And
you had to take a standardized personality test. In 1977, I
interviewed at Arthur Andersen. They wanted to give me a
personality test, and I walked out. I'm glad I'm still in
business, and they're not."
— Richard Konigsberg
Students say: "The material is so relevant today
with what's going on with Enron and WorldCom. It's
interesting. There's a certain profile that people fit into
who did accounting fraud. They're 33 to 45, religious. I
have worked in public accounting, so my background is
auditing. All of these people [in the class] have never
been in public accounting before, so it's interesting to
hear people's perspectives who aren't in it. It's been a
lot of fun. [Konigsberg] has a lot of experience, and one
thing is that he knows exactly what's he talking about.
He's very thorough, and he's also very entertaining and is
able to make the subject matter very interesting."
— Tristan Hiemstra, a senior accountant at
Constellation Energy Group
"One of the great things is, we're not following a
textbook. We're looking at real-life examples. It's a lot
of reading — five books — but the good part is
that it's real-life examples of what we learn about."
— Kim Ellis, who works in physicians billing
services at Johns Hopkins
Jessica Valdez, a senior majoring in international
studies, is an intern in the Office of News and