Academic journal article Journal of Accountancy

System Needs More Than Band-Aids. (Letters)

Academic journal article Journal of Accountancy

System Needs More Than Band-Aids. (Letters)

Article excerpt

I take exception to the letter "Sees Profession as Scapegoat" (JOfA, Dec.02, page 15). The Enron debacle did not result because "one Andersen partner didn't do his job." If one Andersen employee could cause the magnitude of grief that resulted from the Enron situation, there are more fundamental problems involved than we as a profession can ever hope to solve. An entire floor of auditors worked exclusively on Enron all year. To think the entire blame rests with the single person who occupied the corner office on that floor is unreasonable.

In the best case, the Enron collapse was the result of a single audit team's failure. In the worst case, it was the fault of the profession.

Also, I would like to see some new thinking with respect to fraud. The letter correctly pointed out that most audits focus on "those areas most susceptible to fraud--mainly property, personnel and money." This indeed represents the traditional view of fraud, and it has served the profession well in the past when most corporations were single, isolated entities that could be audited as a whole. The modern corporation, however, is a vast maze of interrelated entities. I think related-party transactions are a growing area in modern-day fraud, and the profession is ill-equipped to audit these types of deals. …

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