Enron case Essay Example | Topics and Well Written Essays - 1000 words

Enron case - Essay ExampleThe companies acts usually serve to offer adequate regulatory approaches, that attendee and companied to adhere to. With this respect, it is a requirement of SEC that all public corporations should have outside auditors to undertake the auditing process. This implies that an outside auditor is supposed to offer opinions regarding the precision and dependability of the companys accounting statements, taking into consideration the principle of objectivity, in sufficiency of biasness and avoiding the engagement in activities that are likely to result to lack of auditor emancipation (Haines 14). As a result, auditors are required to display utmost ethics and honesty in the code of duties, which requires auditors to display integrity, objectivity and independence. The regulatory oversight that resulted to the Enron caper is a violation of the aspect of auditor independence as evident by Andersen having an office space in Enrons headquarters that was permanen t. This served to reveal lack of auditor independence (Hill & Cronk 10). In addition, there is a possibility that Andersen overlooked Enron familiaritys compliance with the required accounting policies, procedures and practices. In addition, Enron Corporation had relied on the auditing services from Andersen, resulting to him familiarizing with the corporations accounting policies and practices. The Enron scandal served to reveal the significance of auditor independence as a result, the fraud served to question the efficiency and the adequacy of the present audit independence regulatory frameworks. The auditing procedures prior to the Enron fraud were sufficient to ensure that there is high audit quality, but in some cases fails to pose misappropriations (Hodgetts & Luthans 33).There have been significant changes in accounting regulations after the collapse of the Enron Corporation with the main