The business of accountants is to make the complicated simple. An accountant tries to reduce the most complex business enterprise into short, comprehensible reports and balance sheets.

Marc J. Epstein, a visiting professor who teaches accounting at Harvard Business School, last month had to explain to a Middlesex County court an accounting history which, he acknowledges, is anything but simple.

Epstein, according to bank officials and attorneys familiar with the case, defaulted on a $1.5 million loan he guaranteed from Los Angeles-based Mitsui Manufacturers Bank in 1988. But after a Los Angeles court ruled in 1992 that he was liable for the loan, interest and court costs, Epstein, by then a professor at Yeshiva University in New York City, had left town. The bank says he didn't leave a forwarding address.

So Mitsui Manufacturers Bank came to Harvard to find him. Last month, they filed suit in Middlesex County Superior Court seeking to recover the $2.7 million in damages he owed as part of the Los Angeles suit. Charging that he might flee Massachusetts if he learned about the new suit, the bank filed an ex parte motion which sought to dock his Harvard paycheck.

That motion failed, but the bank was able to win some money from Epstein. According to a document obtained by The Crimson, Epstein will pay $13,000 a year in equal monthly installments to Manufacturers Bank. At that rate, the $2.7 million will be paid off in 207 years.

Epstein, interviewed twice this week while attending a conference in Turku, Finland, repeatedly emphasized that the case was a matter of his personal finances and had been settled. He said he had guaranteed the loan for two companies, with which he was involved, and that he is pursuing unspecified action to recover the money he will be paying to Manufacturers.

A review of the situation conducted in March by officials both inside and outside the Business School concluded that there was no reason to prevent Epstein from returning to the school next fall for a second year as a visiting professor.

The court settlement and this review may complete the episode. But according to Epstein's colleagues and students at the Business School, the loan default, at best, raises questions about Epstein's judgment, and, at worst, raises questions about his ethics.

First and foremost, why does a professor of accounting have a messy financial past?

Epstein graduated from San Francisco State University in 1968 with a degree in Business Administration, according to the registrar's office there. He went on to the University of Oregon, where he first earned a master's degree in business administration and later a Ph.D in accounting.

Until four years ago, Epstein helped run Western Consulting Group Inc. and Western Business Investors Inc., which had the same address at 8718 Woodley Avenue in Sepulveda, Calif., according to the California secretary of state's office.

Epstein says he was chair of the board of Western Consulting, and the only employee of Western Business. The state government lists him as president of both.

The companies were heavily involved in the California real estate market, which boomed during the Reagan presidency and busted in recent years. Epstein says he was also involved in investments with the entertainment industry, and his Harvard students say he often told stories about his connection to the Hollywood elite during his class on financial reporting and management accounting last fall.

"We did do business management for some things in entertainment," Epstein says. "Real estate and general business."

Epstein says he remembers few details of both companies. "I don't remember the details of the company. I was involved in many companies," says Epstein. "Whether I was the founder [of Western Consulting] or someone else was the founder, I don't know."

But on one point, Epstein is sure. He says he had little to do with the financial demise of the two companies. Western Business Investors went out of business on October 1, 1991, and Western Consulting followed on October 15, 1992.