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Audit and Corporate Scandals

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Given the recent accounting scandals, how much confidence should the public really have in financial audits?

In light of recent audit failures, are current audit standards sufficient to ensure the integrity of audit opinions? Why or why not?

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The solution discusses how much confidence should the public have in financial audits.

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I think that a lot of those accounting scandals that occurred in the United States in the last 10 years did so under a completely different environment. When the Enron failure occurred, the Big Four accounting firms had not yet separated their auditing functions from their consulting functions. Thus, while Arthur Anderson was acting as an auditor for Enron, they were also collecting millions of dollars in consulting fees. Ever since the Enron collapse, there have been significant changes at the ...

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