Enron's Audit

The auditing profession is a key reason that the United States enjoys the most well developed capital markets in the world. Auditors provide shareholders, lenders, employees, customers, suppliers and policy-markets with the assurance that the financial information provided by companies is reliable. During the past few years, the auditing profession has received unprecedented attention. Andersen's audit of Enron was front-page news, a place where auditors seldom find themselves. Unfortunately, Enron's success story is nothing but …

…does not fail only when there is an audit failure. I learned that even when an unqualified audit reports issued, a company could go bankrupt because of an economic of business condition like poor management, recession or unexpected competitor. I do not believe that Enron went to bankrupt because of Andersen's poor audit, but I believe that Andersen should have been careful to escape from their biggest crisis since Enron was not a small business.