شرکت Enron به عنوان نشانه ای از شکست فرایند حسابرسی : آیا قانون ساربانز-آکسلی می تواند این بیماری را درمان کند؟

Andersen’s deficiency in the Enron case mainly involved an unwillingness to stand up to Enron management regarding accounting issues. This is a critical phase of the audit; however, it is only one phase of an audit. This paper presents a model of the auditor’s misstatement detection and reporting process, which consists of three steps: (1) awareness of the transaction, (2) recognition that the transaction’s accounting treatment results in a misstatement, and (3) a willingness to modify the audit opinion to disclose the nature of misstatement if management does not correct the misstatements. For an auditor to best serve the public interest, he or she would need to carry through all three steps of the model. Five recent financial statement misstatements are then addressed: Sunbeam, Cendant, Waste Management, Enron and Worldcom. What emerges from a review of these recent cases is that the failure point in the misstatement detection and reporting process varies among these cases and there are often multiple points of failure, suggesting the need for multiple approaches to improving the process. The Sarbanes-Oxley Act, passed largely as a result of the Enron failure, attempts to improve the audit process for public companies in the US. The relationship of the act’s provisions to the misstatement detection and reporting process, and their potential efficacy in preventing cases similar to the recent frauds are addressed. From this analysis, the paper concludes that most of the audit-related provisions of the Sarbanes-Oxley Act are concerned with strengthening auditor independence. Because other aspects of the audit model have been responsible for some recent frauds, the Act may be treating the symptoms of the audit breakdown which appear to have caused the Enron failure, while missing an opportunity for more meaningful legislative reform of other aspects of the audit process which are associated with other recent frauds.

Recent legislative action in the US (the Sarbanes-Oxley Act; US Congress, 2002) has sought to strengthen the audit process principally through prohibitions on certain types of consulting services and by transferring professional disciplinary authority from the principle professional association to a public body not dominated by members of the accounting profession. The main focus of audit process enhancement embodied in the Sarbanes-Oxley Act is an attempt to strengthen external auditor independence. While such reform may be necessary, there are other aspects of the audit process which recent audit failures suggest may also be in need of reform. The purpose of this paper is to examine five recent high profile frauds which have caught the attention of both the investing public and the US Securities Exchange Commission (SEC). The main US legislative initiative, the Sarbanes-Oxley Act, is examined in light of the circumstances surrounding recent financial statement frauds and audit failures. The potential effectiveness of the Sarbanes-Oxley Act in preventing future similar occurrences is then presented. The remainder of this paper is organized as follows: first, a discussion is presented of the process whereby an auditor “catches” a material misstatement which would cause him or her to modify the audit opinion (i.e., the auditor’s misstatement detection and reporting process). Next, a discussion is presented of several recent high profile financial statement frauds and/or audit failures, and how these situations may reflect a failure to adhere to good audit processes. Next, the provisions of the Sarbanes-Oxley Act are discussed, together with an indication of how the Act’s provisions relate to the auditor’s misstatement detection and reporting process. This is followed by a discussion of the potential for the provisions of Sarbanes-Oxley to prevent the types of failures in the audit process exemplified by the recent cases. The paper concludes with a summary.

This paper sought to review the available knowledge on recent financial statement frauds to determine where the auditor’s misstatement detection and reporting process failed to protect the public from misleading financial statements. The review indicates that each case represented a distinct combination of an auditor failure to see the transactions, to recognize the transactions as misleading, and/or to disclose the problem in the audit report. The provisions on the regulatory reform initiative, the Sarbanes-Oxley Act, were found to address portions of each of these issues. Some deficiencies in recent cases, however, were not likely to be susceptible to mitigation by the provisions of the Sarbanes-Oxley Act.