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A series of massive collapses and scandals at large companies that had received the all-clear from high-profile accounting firms reflects the need for major changes. Jonathan Weil writes in his new column, “Financial Scandal Aficionados Never Had It Better”:

If you happen to be a connoisseur of accounting scandals, then the past month or so has been about as good as it gets, capped by the unfolding disaster at Olympus Corp. On the flip side, if you work as an auditor for a big accounting firm, it just got that much harder to make the case that society should value your services.

The scam at Olympus was simple, even if the means were sometimes exotic. The Japanese maker of cameras and endoscopes hid losses by treating them as assets. It says it had been doing so since the 1990s. This might have stayed under wraps had Olympus’s chief executive, a Briton named Michael C. Woodford, not pressed the matter internally in response to a Japanese magazine story this summer about some of the company’s more unorthodox dealings. Olympus’s board responded by firing Woodford, who was just six months into the job. Now it turns out his warnings about the company’s finances were right.

Where were the auditors? While we still don’t know the full extent of what they knew and when, just looking at who the outside auditors were is fascinating in itself.

Olympus’s auditor in the 1990s was the Japanese affiliate of Arthur Andersen, then one of the so-called Big Five accounting firms. After Andersen collapsed in 2002, KPMG acquired its Japanese practice, which operated under the name Asahi & Co., and took over Olympus’s audit. KPMG remained the auditor through 2009. Olympus switched to Ernst & Young later that year.

Viewed that way, it seems the ghosts of Andersen may still be with us. It was indicted in 2002 over its conduct as auditor for Enron, the failed energy trader, in what was the equivalent of a death sentence. Afterward, big-time accounting frauds turned up at many of the firm’s former clients — names that included WorldCom, Dynegy, Qwest, Freddie Mac and Refco. Olympus seems on its way to joining that list. It just took about a decade longer for the problems there to surface.

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Jeff Danziger lives in New York City. He is represented by CWS Syndicate and the Washington Post Writers Group. He is the recipient of the Herblock Prize and the Thomas Nast (Landau) Prize. He served in the US Army in Vietnam and was awarded the Bronze Star and the Air Medal. He has published eleven books of cartoons, a novel and a memoir. Visit him at DanzigerCartoons.

Stewart Rhodes

Ten of the eleven members of the white supremacist militia group Oath Keepers who have been charged with seditious conspiracy, including founder Elmer Stewart Rhodes, pleaded not guilty in a virtual hearing on Tuesday. The eleventh person charged was not present, and did not enter a plea.

The judge in this case is U.S. District Judge Amit Mehta, the same judge who earlier dealt with, and dismissed, claims that Trump has “absolute immunity.” Judge Mehta also forced Trump’s attorney’s to backtrack over claims that Trump had tried to calm down the situation on January 6, 2021.

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