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Judith Walo
Frog Farms, Enron’s Folly, and High Integrity
“Integrity,”
the word resounds in capital letters when Judith Walo pronounces it. “I
tell my students integrity is what the accounting profession demands.
Cheating could effectively bar their entry. And, as it relates to
academic honesty, it is not tolerated in class.” Hazel eyes brightening,
the accounting professor and chair of the Accounting Department
declares, “Without integrity, the profession would cease to exist.”
Dodging is not in Dr. Walo’s character. Sophomore Manoj Daswani
describes her as a “straightforward” but inviting professor who knows
the “big picture of accounting concepts and also very minor details.”
When a timid hand goes up and an Introduction to Accounting student
asks, “What went wrong with Enron?” Walo replies, “Enron’s fraud was
hiding its debt on special purpose entities and inventing new ventures.
Arthur Andersen—no longer with us—should have caught it, but the fraud
was very complex. Until the late ’80s and ’90s, the accounting firm had
an excellent reputation, but by the time of its demise only 30 percent
of its revenues were generated by auditing and accounting, the rest came
from tax work and consulting the same clients they were auditing. The
issue became one of independence and autonomy. Basically, of integrity.”
A 22-year veteran of teaching, the last decade here at CCSU, Walo has
broad experience. Her educational background spans from the University
of Rhode Island, where she earned a bachelor’s in business, to the
University of California at Berkeley, where she received an MBA in
accounting, and to Michigan State University for a doctoral degree. As a
graduate assistant at UC Berkeley and Michigan State, she discovered
“it’s easy to teach students who are mainly traditional, bright,
motivated, and not distracted by the demands of outside employment.”
Southern Illinois University, Edwardsville, where she was an assistant
professor from 1989 to 1994, she describes as “similar” to CCSU: “It was
a commuter college, and students often held jobs in addition to going to
school. They were not necessarily headed for public accounting, the
professional track for becoming a Certified Public Accountant.” Walo
felt an affinity with such students. “My family background was not in
the business professions, and going to UC Berkeley helped me stretch. I
can relate to students who are the first generation to seek higher
education and the challenge they must feel.”
Satisfaction of Being Needed
Warmly, she asserts, “My Central students need me, because they depend
on me for interpretation and explanation of what’s important in theory
and practice.” Teaching students how to read financial statements, she
urges them to persevere in deciphering tons of material: “Most business
managers must understand such statements and have the skill to
effectively use them in decision making.” Other times, speaking of her
55-hour weeks as a CPA and audit supervisor at Coopers & Lybrand (now
Price Waterhouse Coopers) in San Francisco, she stresses the expectation
of quality work, accuracy, and documentation. “A public auditor must
conduct extensive testing to be certain financial statements are
prepared in accordance with generally accepted accounting principles.”
In addition to tackling her role as chair, she shoulders primarily
upper-division accounting courses for majors, with some graduate and
introductory level teaching. Laughing, she describes her classroom
approach: “I like to ask questions, because I have an endless curiosity,
which I hope rubs off on students. I distrust PowerPoint. That’s too
slick for me. I’m not connecting. I like to look at my students’ eyes to
see if they get it or if they need more help. Rapport is important, and
I want to send the message that I’m not a scary person.”
Goals for her graduate students, she says, are “to teach them to do
research, find authoritative literature, and apply the theories of
accounting.” Grinning, she describes the “Ribbit” case assigned to MBA
students in her Accounting Theory course. The Ribbit company, a
hypothetical frog farm, sold grow-a-frog kits to toy stores. A large
supply of tadpoles as well as adult frogs were kept on hand. Both were
classified as inventory on Ribbit’s financial statement. Life of the
frogs had been less than one year, but through breeding it was extended
to three years, which is considered a long-term asset. The problem: How
are the company’s assets affected, if at all, and how will they be
recorded in financial statements? Walo says, “Businesses are continually
changing. When a transaction is new and no standard has been written yet
on how to record it, accountants using accounting concepts must devise
the best approach, and with Ribbit they supported their decisions with
theory, defended their choices, and had fun!” Karen Francini, capital
project administrator at CCSU, states, “By the end of each evening
class, my fatigue had passed and was replaced by enthusiasm. Dr. Walo is
not pedantic and shares her valuable personal and professional
experiences to bring alive the very people and issues we were studying.”
Creative Activity
This October, Walo’s latest article, “Disclosures of Audit Committee
Responsibility” appears in the CPA Journal. She and colleague Annemarie Keineth of Indiana University studied audit committees using best
practices and new requirements under the Sarbanes-Oxley Act. “We found
they need to do significantly more to heighten their oversight,”
concludes Walo. Currently her research is in accounting history and in
major frauds. “I want to scrutinize wide-scale collusion where numerous
individuals are involved in corruption and no one comes forward and this
lets the fraud happen.”
Accreditation by the Association to Advance Collegiate Schools of
Business International is a large item on Walo’s agenda these days. She
welcomes the hard work that lies ahead. “Our students deserve to be
acknowledged as graduating from an AACSB institution which has met
high-quality standards.” Walo herself is the “tops,” according to alumna
Kelly Priestley ’03. Now a financial analyst at Pratt & Whitney,
Priestley, former co-chair of the campus Accounting Society, welcomes
having a CCSU student “shadow” her to learn daily accounting functions.
She exclaims, “Just a bit of repayment to Professor Walo, who was one of
my favorites at Central, someone who always went the extra mile to help
us succeed—one of the most caring professors I’ve known.”
— Geri Radacsi
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