US Securities and Exchange Commission chairman Christopher Cox has told the American Institute of CPAs conference that the complexity of the accounting system was partly to blame for corporate scandals of recent years.

financial accounting Standards Board chairman Robert Herz blamed it on a number of forces. In his address, Herz pointed the finger at stuff like conflicting views and agendas, rules-based standards (which to my mind has always been like giving a burglar the manual to your alarm system), gaps in education and training of beancounters and sheer terror of being second-guessed by regulators, enforcers and lawyers. This has resulted in disclosures that are complex, dense, overly-legalistic and boiler-plate, stuff that tells you everything and nothing.

But can we seriously make it less complex? In his address, SEC acting chief accountant Scott Taub made the excellent point that accountants and auditors these days tend to stick to whatever is "safe". No-one is prepared to stick their necks out. As a result, they tend to do more work than less, and they tend to go for the more conservative interpretations. "While the current reactions may be predictable, they nonetheless make it quite difficult to move to less complex accounting standards that rely more on principles and less on rules."

OK, maybe they have a point about complexity. Get rid of it and there are fewer places to hide, or conceal bad stuff.

But is the problem really about complexity, or is it really about dishonesty. As Pennsylvania State University accounting professor J. Edward Ketz points out, making the rules less complex doesn't change the hearts and souls of some business executives. "If managers truly cared for the investment community, they would not engage in self-dealing activities and report transactions in opaque clouds that merely distort whatever shreds of truth still exist."

So will we really end scandals if we get rid of complexity? Or is the real problem about bad people hiding behind it?