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Congress and Accounting Scandals: Is the Pot Calling the Kettle Black?

Cheryl D. Block

Washington University in Saint Louis - School of Law

GWU Law School Public Law Research Paper No. 130

Congress, outraged by Enron, WorldCom and similar scandals responded with the Corporate and Auditing Accountability, Responsibility, and Transparency Act of 2002 (Sarbanes-Oxley Act). The FASB imposes, and Sarbanes-Oxley reinforces accounting standards applicable to the private sector. Although the federal government has adopted FASAB rules, which impose similar standards upon government agencies, the Government Accounting Office (GAO) reports that a substantial number of agencies are in noncompliance. Moreover, these rules simply do not apply to the federal budget process itself. This Article examines the pervasiveness of this double standard and describes numerous ways in which Congress uses number games and gimmicks, including the off-budget trick, to mislead the public as to the true extent of the federal deficit. Many of these gimmicks are remarkably similar to those that Congress found so outrageous when they were used by Enron and others to mislead investors on their true financial conditions.

Number of Pages in PDF File: 96

Keywords: Sarbanes-Oxley, FASB, budget, tax policy

JEL Classification: H61, H62, K23, K34

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Date posted: February 15, 2005  

Suggested Citation

Block, Cheryl D., Congress and Accounting Scandals: Is the Pot Calling the Kettle Black?. Nebraska Law Review, Vol. 82, p. 365, 2003. Available at SSRN: https://ssrn.com/abstract=667483

Contact Information

Cheryl D. Block (Contact Author)
Washington University in Saint Louis - School of Law ( email )
Campus Box 1120
St. Louis, MO 63130
United States
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