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5 million in audit fees and $27 million for non-audit consulting. In this case, the general beliefs of the public are that the audit independence will be impaired by providing NAS, especially when the non-audit fees are higher than the audit fees. Therefore, the providence of NAS is regarded as the major cause leading to the audit failure. (Benston and Hartgraves , 2002)
However, as Joseph Berardin, the former CEO of Arthur Andersen, argued, Enron with the total assets of Enron is $650 billion and annual revenue over $1000 billion has the largest electronic business system in the world, and therefore the complexity and scale of the audit work must be huge. In this case, the fees charged on Enron are not incredibly unreasonable. Meanwhile, the NAS provided by Andersen are very necessary, because some of them are always or can only be provided by certificated professional accountants. Therefore, the NAS provided by accounting companies will not impair audit independence.
In the Enron case, $3.5 million out of $27 million non-audit fees are tax preparation and advice which are normal services provided by most accounting firms, so there is not any beneficial conflict in this case. Another $3.2 million was paid for the audit over a new accounting system which was designed and installed by one of the Big 5 companies. Moreover, $4million was the consultancy fees paid to Accenture, the previous Andersen Consulting company and Andersen was apart from Accenture in August 2000. Furthermore, there are other services which must be provided by accounting companies. Taking into account all the factors stated above, the fees paid for NAS were only $13.3 million and fees charged upon each individual consultancy or service did not exceed $3 million. In other words, the fees charged over audit services or audit related services were more than 70% of total fees charged. The conclusion that NAS impair the audit independence is unreasonable. 
Furthermore, it is normal in this era for non-audit fees to be higher than audit fees. KPMG charged Motorola $62.3 million for consultancy fees and $3.9 million for audit fees in 2001. The non-audit fees paid for E&Y by Sprint were $63.9 million; by contrast, the audit fees were only $2.5 million in the same year. PWC charged AT&T $48.4 million for consultancy fees while $7.9million for audit services. The yawning gap between audit fees and non-audit fees cannot prove that NAS threatens audit independence. If this was the case then the scandal should have happened to Sprint rather than Enron, which only had $2 million differences between audit and non- audit fees.
Lessons learned from Enron:
Though we cannot form the conclusion that audit independence will be compromised by NAS through the Enron case, it does not mean that Anderson was innocent. There are many factors leads to its collapse.
‘Andersen’s partners and staff do not appear to have exercised the requisite skepticism that auditors should adopt. Rather, they appear to have accepted too readily management’s valuations and determinations with respect to valuations and related-party transactions. It is possible that this presumed lack of skepticism and distance is simply a failing of the particular auditors-in-charge. It could also be a consequence of auditors having been associated with Enron for many years. (Familiarity may breed over-involvement with and empathy for managements’ worldview, 本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。