The accounting industry has taken a pounding the past few months because of the role Arthur Andersen played in the collapse of Enron Corp.
Now, as Congress continues to investigate the causes of the largest bankruptcy in U.S. history, members of the accounting profession are starting to fight back with advertising campaigns designed to educate the public and shore up the industry’s reputation.
The most visible ad campaign is the one launched March 10 by the American Institute of Certified Public Accountants, with full-page ads in The New York Times, USA Today, Chicago Tribune and The Dallas Morning News. The AICPA, which represents 350,000 CPAs nationwide, has also bought ad space in The Wall Street Journal and smaller dailies throughout the country.
The ad does not mention either Enron or Andersen by name, but it tries to establish some distance. "Each day. Every day. In big cities. In small towns. Away from the headlines. We are here," the ad begins. It goes on to say that AICPA members auditing financial statements and providing tax services are "counted on for integrity. Passionate about getting it right. And intolerant of those who break the rules."
The campaign, slated to run through late April, includes 30-second radio spots airing on more than 300 stations. Heavy volume is expected on ABC Radio Networks, Bloomberg Radio and Wall Street Journal Radio. The campaign budget was not disclosed.
"The message is that the 350,000 CPAs nationwide whom you have been doing business with are the same high-integrity CPAs the company has come to depend on," said Geoff Pickard, a spokesman for the AICPA. "We have to maintain business as usual but also deal with the issues that have come up because of the Enron/Arthur Andersen debacle."
Contents from both the print and radio ad campaigns will be made available to the AICPA’s 50 state societies so they can tweak them for local media markets. The AICPA will evaluate the campaign after six weeks.
"This is not just damage control for Enron and Arthur Andersen, but everybody associated with those businesses," said Alan Jurmain, exec VP-director of media services at Lowe & Partners Worldwide. "They have to recognize there have been systemic problems and tell people [in ad campaigns] that this is what we’re doing about it to make sure we’re providing quality service. … They can’t pretend it’s not there."
Rick Segal, CEO of adverting agency HSR Business to Business, said: "All businesses face a crisis at one time or another, and the discipline of good communication is important. Permitting for some time from when the crisis began shows them to be responsive rather than reactive. I’d be fairly critical if they were not being more proactive."
A recent survey commissioned by Chicago-based public relations firm Golin/Harris International found a level of skepticism toward business that goes beyond the Enron and Andersen debacle. Sixty-nine percent of the 700 people in the U.S. surveyed said they "don’t know whom to trust anymore" in the business sector.
By a margin of seven to one, survey respondents said "recent economic events have created a crisis of confidence and trust in the way we do business in America," and, as a result, they’re "going to hold businesses to a higher standard in their behavior and communications."
The accounting industry received a score of -48 in the trust survey, compared with an overall average of –20. The oil and gas industry, in which Enron is a major player, had the worst rating, -63.
Last week, President Bush proposed creating an independent regulatory board under the supervision of the Securities and Exchange Commission to develop standards of professional conduct and competence for the accounting industry. The board would monitor, investigate and enforce its "ethics principles" by punishing offenders.
Some state accounting societies have shifted the focus of campaigns to address the Enron/Andersen scandal.
"Instead of talking about what CPAs do, we’re going to talk about their core values of integrity and independence and the role they play as being trusted business advisers," said Susan Waters, CEO of the California Society of CPAs, which represents 27,000 CPAs.
The California society is running ads in The Los Angeles Times and San Francisco Chronicle and plans to expand the campaign to Business Week and Newsweek. The campaign will also include local radio ads and image ads in smaller airports that cater to business travelers in California.
Damage control, Texas-style
In Enron’s home state, the Texas Society of CPAs has a full-page ad in the March issue of the Dallas Business Journal. The ad is in the form of a letter from the group’s chairman, Gary McIntosh, who expresses sympathy for the Enron employees who lost their life savings in the company’s bankruptcy but also stresses that the entire accounting profession should not be branded by the actions of a few.
The Texas group, which represents 27,000 members, many of whom once worked for Enron, is considering running the same ad in business journals in Houston, Austin and San Antonio.
"This is going to be on people’s minds for a while, and you need to shift the focus to help the public understand," said John Sharbaugh, executive director of the Texas group. He said the society is considering running radio spots to augment the print campaign.