Issue link: https://www.e-digitaleditions.com/i/63444
YourTurn Putting Enron in Its Place Enron has caused the phones of accounting professors everywhere to ring, as reporters call to seek our views on "just what went wrong." Often, they ask us how we plan to teach Enron to our students. The first reporter who called me was shocked when I gave him my answer: I don't plan to devote a significant amount of time to Enron in my financial statement analysis course. Although Enron may warrant more than a passing mention, it is simply not a case I want to use in detail. The reporter was baffled: Not teach Enron? How could I ignore it? After all, the company's failure crosses a variety of topics, including concepts in accounting, ethics, cor- porate governance, and other areas. Because it is so all- encompassing, Enron seems the perfect example to use as the basis for teaching these con- cepts. Moreover, the reporter said, "employers expect students to under- stand what went wrong with Enron." But is using Enron good pedagogy for my particular course? I don't believe it is. You see, I've been down this road by Jan Barton next year, when the time came to teach the course again, I was ready with my Internet-laden syllabus. But by that time, students had decided that Internet firms were no longer "cool," let alone relevant. That meant I had to change the course once again. As an assistant professor seeking tenure, writing research, presenting at conferences, and teaching, I could ill afford the time it took to rewrite the course. If a course must be revamped because it's outdated, that's one thing. But to revamp a course to reflect a current fad just to seem up- to-date—without a sense of that fad's longevity—can be counterpro- ductive. Of course, hindsight is always 20/20. I know I was not the only one to But the market moved on. The I am not saying that Enron is irrelevant to teaching business. I am also not saying that Enron may not make a great case study in the future. But until we know the full causes and consequences of Enron, using it to teach core principles of financial statement analysis and valuation may not be the best pedagogical choice. before. Three years ago, you could- n't watch the news or read a maga- zine without seeing something about Internet companies. Almost daily, students in my course would ask how these companies—with no history, no comparables, no profits— 62 BizEd MAY/JUNE 2002 could be valued. Internet companies seemed so central to what was hap- pening in business that I succumbed by redesigning my course with a heavy focus on analyzing Internet companies. Students studied prospectuses and financial reports to assess these firms' accounting poli- cies and stock prices. They enjoyed the project. My new syllabus seemed very relevant. was whether they were the best models for teaching students the core financial analysis concepts they need to know. I learned a valuable lesson. Using jump on the Internet bandwagon, creating courses that explored these hot startups that seemed to violate all the rules of val- uation. But the question to ask at the time was not whether Internet companies were interesting, or even relevant, to my courses. Rather, the question to ask the latest business "fad" to teach business concepts can seem like a good idea. But fads, by their nature, are temporary, and they can become quickly outdated. The fundamental concepts in business are best com-