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The newspaper of The Johns Hopkins University December 6, 2004 | Vol. 34 No. 14
JHU Course Catalog: Corporate Fraud

CPA Richard L. Konigsberg teaching his SPSBE class.

By Jessica Valdez
Special to The Gazette

Editor's note: This is part of an occasional series in which reporters drop in on interesting classes throughout the university's eight academic divisions. Suggestions are welcome at

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 2004.

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 findings.

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 Reingold.

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 Information. GO TO DECEMBER 6, 2004 TABLE OF CONTENTS.

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