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As a whole, it is still a question whether less liability for auditors in certain areas will encourage more accurate financial statement. These are still challenges ahead for the auditor, especially facing legal suits filed by third parties due to misrepresentation of financial statement.

4.0 相关的话题——4.0 Relevance of the Topic

4.1 安然案件——4.1 Enron Case

案件总结——Summary of the Case

During the 1990s, Enron is a relatively small domestic Texan energy company. Then, Enron become one of the largest US corporations with a selection of international energy trading and utility operations. Enron has a strong profits grew and its market value has reached $70 billion (Accountancy as cited in Unerman & O'Dwyer, 2004).

However, concerns relating to Enron's profitability and the major share sales by senior executives have driven a slow but continual decline in share prices in August 2000. In October 2001, US stock market was shocked by the announcement of Enron about the accounting 'adjustments' leading to a significant loss for its third quarter of $618 million and a decrease in its reported net asset value of around $1.2 billion. (BusinessWeek cited in Unerman & O'Dwyer, 2004). At the following weeks, the aggressive earnings management practices by hiding large scale losses and liabilities on off balance sheet was revealed. The senior executives of Enron had created about 3500 off balance sheet partnerships (Special Purpose Entities (SPEs)) (Sloan cited in Unerman & O'Dwyer, 2004). Enron filed for Chapter 11 within 2 months. It has become the largest corporation to enter Chapter 11 bankruptcy with $55 billion estimates of outstanding liabilities. Many official inquiries into Enron where started after the company was collapsed (McLean cited in Unerman & O'Dwyer, 2004).

Auditor of Enron - Arthur Andersen

Arthur Andersen, one of the Big Five global auditing firms, was auditor of Enron. In January 2002 allegation surfaced that, Andersen had shattered most of its working papers with Enron when the Securities and Exchange Commission (SEC) initiated the investigations into accounting practices at Enron (The Business cited in Unerman & O'Dwyer, 2004).

Further investigations disclosed that Andersen had played a key role in developing the aggressive earnings management techniques executed by Enron. Andersen was exposed to conflicts of interest because it made more fees in 2000 from selling consulting services to Enron ($27 million) than it did from auditing the Enron's accounts ($25 million) (McLean cited in Unerman & O'Dwyer, 2004). Many clients of Anderson were switched to other big auditing firms because they lost faith in Andersen after these revelations. Andersen was collapsed due to this withdrawal of trust. As a result, there are only Big Four global auditing firms after Enron case.

SOX and its impact on Auditors' Liability

Sarbenes-Oxley Act (SOX) was enacted after the collapse of Enron. A lot of major developments in auditors' liability have arisen in US as a result of SOX. The main purpose of SOX is to increase the transparency of financial reporting by improving corporate disclosure and governance practices and to encour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。