Business, Management and Accounting
8 years ago

Audit System Flawed: Enron Collapse Inevitable, 'Independence' Impossible

SSRN Electronic Journal
The Inevitability of Enron and the Impossibility of 'Auditor Independence' Under the Current Audit System
Seán M. O’Connor

Paper Summary

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The Enron scandal was not a surprise given the flaws in the current audit system. The system was designed to prevent financial abuses by having independent auditors check company books. However, in reality, auditors can't truly be independent due to various reasons. This makes it impossible for auditors to effectively protect shareholders and the public from financial misconduct.