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Retired judge returns for Briloff lecture

By : Katie Ellis

Twenty years ago, Stanley Sporkin gave the Abraham J. Briloff Lecture and spoke about the survival of the accounting profession given the technological revolution that was then under way. On Nov. 12, Sporkin made a return engagement to Binghamton, delivering the 22nd annual Briloff Lecture on Accountability and Society for the School of Management. His topic this visit: “On the Road to Financial Shangri-La — What Happened?”

Sporkin, a retired federal district court judge who also spent 20 years with the Securities and Exchange Commission and five years as general counsel to the CIA, said today’s unprecedented financial challenges have arisen from a “sense that unrestricted free markets would save our world” as our nation grew to one that “essentially knew no financial limits — an understatement of immense proportions.”

Sporkin believes the current situation began when the United States turned from a producing to a consuming nation. “We dismantled our basic industries and sent them and the jobs they provide overseas to our competitors,” he said. “These jobs were necessary to fuel our economy and our financial crisis started when our labor force, no longer gainfully employed, could no longer keep up the payments on their homes.”

But there is more to it, Sporkin said: “What is being overlooked is the role being played by the so-called smartest guys on the block, bent on dismantling our financial regulations and regulatory standards.

“The smartest guys on the block created vehicles that threw all caution to the wind, not knowing whether underlying debt would be repaid,” he said, and our government leaders told the SEC less than a year ago that our country needed fewer regulations or it would face “dire consequences.”

Instead, Sporkin advocated for more oversight and standards that are in line with other nations overseas.

“These are tough times, but we will get by them,” he said. “But I hope we will no longer allow those who regulate the markets to regulate themselves.”

Not advocating regulation for its own sake, Sporkin did suggest reforms. He envisions regulation as “laser-like, thoughtful, nimble and fair” to enable quick action when trouble appears on the horizon.

“We need better risk and crisis management,” he said, suggesting those two areas be standard course selections for students.

“It’s time for a new study of the securities markets,” Sporkin added. He is working on an accounting project that he believes will be an important step forward in the auditing process — a financial audit that will include forensic analysis as well. “First, study the client and assess its risk,” he said. “Then, if violations are suspected, combine a financial audit with a forensic audit to get to the bottom of it.”

Sporkin said such a process will foster more informed decisions and expand the way clients conduct business and meet legal obligations. “It enhances the overall audit process,” he said.

The lecture series is named in honor of Briloff, who attended Sporkin’s lecture and also addressed the packed Chamber Hall crowd. Briloff is presidential professor of accounting and ethics at Binghamton University and Emanuel Saxe distinguished professor emeritus, Bernard Baruch College, City University of New York. Throughout his career, he has emphasized the need for ethical business practices and influenced others to make the highest ethical standards the basis of their work.

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Last Updated: 10/14/08