Exposure of the Accounting Profession to Increasing Liability
|Francis Marion University |
|Exposure of the Accounting Profession To Increasing Liability |
|Response of the Profession |
| |
| Kim Taylor |
|4/30/2010 |
|This research paper discusses the causes for the increase of exposure of the accounting profession to liability from the early scandals of the|
|decade to the expectations gap. It also discusses some of the professions responses, ideas, and actions in its attempts to deal with this |
|effectively. |
There are many reasons why has the auditor’s exposure to liability has been increasing. Through a succession of major scandals, the accounting profession began to be judged severely. Arthur Anderson in 2002 disappeared after Enron collapsed in 2001 as the largest American bankruptcy case ever at the time. The company disclosed that a major portion of its debt was omitted from its balance sheet on in the company’s audited financial statements. Then came the alarming admission from Andersen that its accountants had participated in destroying audit documents after Andersen had expressed the contention of Enron withholding critical financial information from its auditors.
|Exposure of the Accounting Profession To Increasing Liability |
|Response of the Profession |
| |
| Kim Taylor |
|4/30/2010 |
|This research paper discusses the causes for the increase of exposure of the accounting profession to liability from the early scandals of the|
|decade to the expectations gap. It also discusses some of the professions responses, ideas, and actions in its attempts to deal with this |
|effectively. |
There are many reasons why has the auditor’s exposure to liability has been increasing. Through a succession of major scandals, the accounting profession began to be judged severely. Arthur Anderson in 2002 disappeared after Enron collapsed in 2001 as the largest American bankruptcy case ever at the time. The company disclosed that a major portion of its debt was omitted from its balance sheet on in the company’s audited financial statements. Then came the alarming admission from Andersen that its accountants had participated in destroying audit documents after Andersen had expressed the contention of Enron withholding critical financial information from its auditors.
References: Bloom, R. (2005). ‘The Future of the Accounting Profession’ Report. CPA Journal,75l(11), 6-9. Retrieved April 14, 2010 from Business Source Premier database. Zhang, P. (2007). The Impact of the Public’s Expectations of Auditors on Audit Quality and Auditing Standards Compliance. Contemporary Accounting Research, 24(2)631-654. Retrieved April 14, 2010 from Business Source Premier database. Shean, T. (2002, Jan 14) Enron Scandal Brings Auditors’ Accountability into Question. The Virginian-Pilot, Retrieved April 14, 2010 from General BusinessFile ASAP database. Opening the books. (2006) Economist, 381, (8503), 86-86. Retrieved April 14, 2010 from Academic Search Premier database. Luke, R. (2002, June 27). WorldCom Scandal: Accounting: Big Troubles ‘Just Keep Coming’. The Atlanta Journal-Constitution, p. D3. Retrieved April 14, 2010 from Infotrac General Business File ASAP database. MacDonald, E. (2006). Don’t Blame Us. Forbes, 177.(4), 38. Retrieved April 14, 2010 from Academic Search Premier database. Sally, P. (2010) Auditors Need To Do More, Says FRC Chief. Accounting, 145(1399), 5. Retrieved April 14, 2010 from Business Source Premier database.