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

Enron case - Essay Example The companies’ acts usually serve to offer adequate regulatory approaches, that auditor 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 reliability of the company’s accounting statements, taking into consideration the principle of objectivity, lack of biasness and avoiding the engagement in activities that are likely to result to lack of auditor independence (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 fraud is a violation of the aspect of auditor independence as evident by Andersen having an office space in Enron’s headquarters that was permanent. This served to re veal lack of auditor independence (Hill & Cronk 10). In addition, there is a possibility that Andersen overlooked Enron Corporation’s 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 identify misappropriations (Hodgetts & Luthans 33). There have been significant changes in accounting regulations after the collapse of the Enron Corporation with the main