Post Enron Changes in Accounting Firms

4183 WordsSep 6, 200817 Pages
Major changes in rules and regulations Since the Enron collapsed an array of new laws and regulations has been adopted to tighten corporate oversight. US offices were the first one to come out and implement the policies. Almost all of the firms had their headquarters in the US and they replicated their headquarters policies to a good extend in other offices around the world. Also other governments and regulatory bodies around the world came out with their country specific rules and regulations which are quite similar to the rules in the US. So these two factors ensured that rules which are followed in US are followed at the other places also. Policies might differ in their length and breadth at different places due to cultural, country…show more content…
They have gone from being pretty much self regulated to regulated by the government. The challenge with regard to employees is more because of the requirement. Because of law requiring companies to sign certificates on their internal controls there is a real shortage of resources of chartered accountants. So there is a challenge in terms of being able to sufficiently staff the business. Major organizational changes in Deloitte, KPMG, PWC and E&Y Many accounting firms and independent CPAs reacted to these events and implemented changes in procedure voluntarily. Ethics and compliance matters were always a part of franchise of public accounting firms and it was implicit in what accounting firms used to do. Post Enron era requires not only to have ethics implicit in everything that firms do but they need to make it explicit. They need to be able to demonstrate that not only on paper do they say these are the values but they practice those values and the outsider should be able to see that. Big four accounting firms renewed the way they work and make the new policies top of the mind for all. Barring minor difference these are the four major steps which the big four accounting firms have taken 1. Code of Ethics and Professional Conduct You can find a copy of it online on the site of these firms. All employees are required to be familiar with and understand the Code. It basically spells out the expectations with regard to integrity
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