Auditing Research Project

Auditing Research Project - As a result of the fraud...

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As a result of the fraud committed by Arthur Anderson and Enron many changes were instated within the auditing world. Employees of Arthur Anderson had become so close with the employees of there client that they were almost indistinguishable from one another. “Many of Andersen and Enron's top number crunchers took annual golf vacations together, making friendly bets on each round. They went on ski outings, schussing down the slopes together. Others would sneak away from the office for Astros games at Enron Field and take turns buying margaritas at Mama Ninfa's, a local Mexican restaurant chain. They played fantasy football against each other over the office computers.” (CHICAGO TRIBUNE) The blurred line between the two firms resulted in Anderson not performing a proper audit on Enron’s financial statements. A change in this type of attitude by auditing firms was a result of the Enron scandal. The S.E.C. implemented the Sarbanes-Oxley Act (SOA) in 2002 in order to outline regulation that must be followed by all publically traded companies and their accounting firms. The SOA Act created the Public Company Accounting Oversight Board (PCAOB) which is responsible for the enforcement of the act. Another major change in the Auditing world that was implemented by Sarbanes-Oxley was the creation of section 404 which requires management of publicly
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Auditing Research Project - As a result of the fraud...

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