The Enron And Arthur Anderson Scandal

1758 Words Dec 28th, 2015 8 Pages
According to Ronald F. Duska and Brenda S. Duska, the auditing profession has come under extreme criticism since the Enron/Arthur Anderson scandal came to light. This scandal took the financial industry and the business world by surprise due to the respect and value that Arthur Anderson commanded at the time and also considering the size and magnitude of the client involved, Enron. Arthur Anderson was one of the big five accounting firms in the world who engages in financial audits world over. These audits to the financial statements of Multinational Corporation like Enron are done with a single core purpose in mind, which is to express an opinion on the financial health of the corporation. These opinions according to the authors are very important to stockholders and stakeholders of the corporation. The auditors’ opinion reveals whether the financial statements presented by the corporation are prepared in conformity with the United States General Accepted Accounting Principles (US GAAP) and are presently fairly.
The authors argued that the auditing function should consider as one of the most important functions of an accountant career and accordingly it should not be undervalued. The auditor opinion does influence the rise or fall of stock prices and stock prices do mirror possible future earnings or losses for a company, which could translate into a gain for the company and huge losses to the stakeholders should the auditors have a conflict of interest. So basically, the…

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