Enron Crisis of confidence: Parties responsible and why
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The Enron debacle, followed by accounting scandals and bankruptcies at WorldCom and Adelphia, created what one public official reported was a "crisis of confidence" on the part of the public in the accounting profession. Various parties and institutions bear some degree of direct or indirect responsibility for this "crisis of confidence."
a. List five parties or institutions (not specific individuals) that are primarily responsible for this "crisis of confidence" in the public accounting profession and the independent audit function.
b. State the justification for each party or institution listed.
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Solution Summary
Your tutorial is 278 words and lists the SEC, Arthur Anderson, Enron, Creditors and the AICPA. Reasons are given for each.
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a. List five parties or institutions (not specific individuals) that are primarily responsible for this "crisis of confidence" in the public accounting profession and the independent audit function, and
b. State the justification for each party or institution listed:
1. SEC
The SEC was seen as not being particularly diligent in asking about the strange and growth collection of non-consolidated entities. They were also not taking an interest in the high non-audit fees that were distracting auditors from low fee audit work.
2. Arthur ...
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