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Essay / Research Paper Abstract
This 8 page paper considers the issues in terms of trust and credibility in the accounting profession. The writer argues that historically public trust has been regained as loop holes and standards have been bettered. Using the example of Enron and comparing US and UK accounting and auditing standards the case is made for increasing levels of regulations to overcome the fears and difficulties associated with the causes of mistrust. The bibliography cites 10 sources.
Page Count:
8 pages (~225 words per page)
File: TS14_TEreforms.rtf
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Unformatted sample text from the term paper:
trust, Arthur Andersen were seen as instrumental in the way that Enron produced misleading accounts, and they argued that despite the accounting being misleading they were technically correct and
that all tools used were allowed under the systems that they were being utilised. With these statements, and subsequent problems, as seen with WorldCom have impacted on the confidence of
stakeholders who use the accounts, this is hard to re-establishes. The way accounts are prepared and presented has to abide by legislation and it is expected that the standards will
be those applied by any professional body; including honesty and integrity. Many of the recent problems have resulted from the way that flexibility has been a part of the
rules and accountants finding ways around the rules. The issue of trust is not new, there have been many cases in the past that have raised public concerns and
created the impetus for change to ensure the same events cannot happen again. There have also been cases and subsequent moves to clarify the position of accountants and auditors. The
first case that can show how clarity was needed was that of Kingston Cotton Mill in 1895. This was a case of fraud, and it was with this we might
argue there was the first loss of confidence in the auditors. This case limited the liability of the auditors, but it also clarified their role, it was stated that
an "auditor is a watchdog, not a bloodhound" (ACCA, 2005). However this also did state that the auditor must exercise due care and diligence is well as reasonable skill and
care in each case. It is this due care and diligence tat many stakeholders rely upon. But as cases emerge that indicate the problem is not due care and diligence,
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