Now that Enron is back in the news, are we any safer today
from major bankruptcies than we were a year ago?
Answer: This is a very
broad question. If what you are asking is whether financial reporting
is more accurate today, the answer is yes thanks to accounting reforms
involving CPA firms and laws including the Sarbanes-Oxley Act. If the
question is which sector of the economy is in trouble, one sector is
commercial airlines. According to a recent report, major U.S. carriers
are expected to post losses in excess of $1 billion this year. The 'good'
news is that this is down from the $3 billion in losses posted in 2002!
If you are asking if business bankruptcies will continue to decrease
as they did in each quarter of 2003 compared to 2002 and 2001, the answer
is I do not know - but I hope so. |