It’s always bad news when you see "accounting" and "Enron" in the same sentence. Just so this time, reports the New York Times. New Century financial has been taking advantage of "gain on sale" accounting to inflate its profits and will have to do some restating to get right with the numbers.

The idea got going in 1998, it seems, when CFO Edward Gotschall started touting the use of the accounting technique when the company sold packages of loans to big Wall Street banks. It’s one of those situations, and this is where Enron comes in, that counts all the profits up front, which in turn leads to what one critic calls "creative" accounting. In 2005, for example, $623 million out of $1.4 billion in profit relied on gain on sale accounting.

The use of this technique, says one accounting expert, hurried the demise of New Century because when bankers realized that the profits were not as stated, they quickly forced the company to take back the faltering loans. And they add up to serious losses.

And they say Sarbanes-Oxley was too tough. The fact is that some accountants are always looking to stretch the rules and use them beyond their original context to make things look better than they are. And so long as those Energizer bunnies are on the job, the accounting standards board will have to stay vigilant.